New Delhi, July 21: The government will ask private investors to submit financial bids for Shipping Corporation of India (SCI) in the third quarter of this fiscal ending March 2004.
The government is divesting 51 per cent stake in SCI to a strategic investor with management control.
“Private investors have already started the due diligence process for the controlling stake in SCI,” a senior disinvestment ministry official said. “The financial bids will be invited in September-October and the selloff process is likely to be completed by the end of the calendar year.”
Essar Shipping Limited (ESL), which has submitted the expression of interest (EoI) for the project, is one of the prime bidders. It has joined hands with New York-based AMA Equity Fund. The other bidders in the fray are Sterlite and Videocon.
A senior official of Essar Shipping said, “AMA Equity is basically our funding partner. It remains to be seen whether they will hold an equity stake; that will depend on the government’s transaction documents. ESL is going for the bidding on the strength of its own balance-sheet.”
“If we win the mandate, we will have to go for the public issue, and make an open offer of 20 per cent,” the ESL official said.
The proposed sale is a part of the country’s privatisation drive that aims to collect Rs 13,200 crore through privatisation of state assets in key companies such as National Aluminium (Nalco) and Bharat Petroleum Corp (BPCL).
The government plans to bridge its yawning fiscal deficit, one of the largest in the world, by shedding equity in these state-run firms. It has set a fiscal deficit target of 5.6 per cent of GDP against the 5.9 per cent deficit clocked last financial year ended March 2003.