The Telegraph
Since 1st March, 1999
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CDC wins race for Punjab Tractors

New Delhi, July 25: The CDC group today won the race for the Punjab governmentís 23.49 per cent stake in Punjab Tractors. The stateís Cabinet Committee on Disinvestment approved the firmís offer to buy the shares at a price of Rs 153 apiece in a deal valued at Rs 218.13 crore. The offers of Mahindra and Mahindra, Tafe, Eicher Tractors, Escorts Tractors, Same, CNH, Kirloskar Oil Engines and Warburg Pinuc, the suitors who made it to the initial round, were not in when bidding wound up.

According to an official release, confidential information on Punjab Tractors was passed on to all qualified bidders. In all, 11 firms had said they were interested.

Earlier in the day, Mahindra & Mahindra (M&M), the automotive and farm equipment major, told the Bombay Stock Exchange that its board of directors decided at a meeting today against bidding for Punjab Tractors.

Punjab Tractors, a joint venture between Punjab State Industrial Development Corporation (PSIDC) and the Swaraj group, also owns a 33 per cent stake in Swaraj Mazda and 29 per cent in Swaraj Engines. The share purchase gives CDC Capital control over these companies.

Swaraj Mazda makes light trucks and buses in collaboration with Japanese firm Mazda, while Swaraj Engine, a joint venture with Kirloskar Oil Engines, makes diesel engines.

Punjab Tractors, with a capacity to manufacture 60,000 tractors annually and a 20 per cent market share, had attracted the attention of Escorts and Eicher. The local subsidiary of New Holland and Same Greaves, an Indo-Italian joint venture, were also in the fray. None of them said why their hats were not in the ring.

The FIs, which hold 45.39 per cent of the equity in Punjab Tractors, were earlier opposed to the strategic bidders being allowed to appoint their own nominee as chairman and two key directors, just as the state had been doing. Later, however, consensus was reached.

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