Bids invited for 26% stake sale in BEML
The government on Sunday invited preliminary bids for the strategic sale of a 26 per cent stake along with transfer of management control in defence PSU BEML.
“The government has issued the PIM/EoI for the disinvestment of 26 per cent equity share capital of BEML Ltd along with transfer of management control. Disinvestment will be through a two-stage competitive bidding process,” Dipam secretary Tuhin Kanta Pandey tweeted.
Bidders can submit their expression of interest (EoI) to buy the stake in BEML by March 1, according to the preliminary information memorandum (PIM) issued by the department of investment and public asset management (Dipam).
At the current market price, a 26 per cent sale could fetch about Rs 1,000 crore to the exchequer. Shares of BEML closed at Rs 974.25 on Friday.
BEML is involved in sectors such as defence, rail, power, mining and infrastructure.
The company’s total revenue from operations was Rs 3,028.82 crore in 2019-20.
SBI Capital Markets has been appointed as the adviser by the Government of India (GoI) to advise and manage the proposed strategic disinvestment of BEML.
BEML has an order book of Rs 9,795 crore as on March 31, 2020.
The government has “in-principle” decided to divest 26 per cent stake of BEML through a strategic sale with transfer of management control. The government holds a 54.03 per cent stake in the company.
The government is planning to sell a 10 per cent stake in Rashtriya Chemical and Fertilizers Ltd (RCFL) and invited bids from merchant banker and legal firms for managing the share sale process.
Interested merchant bankers and legal advisers will have to be submit their bids by January 28 and January 29, respectively, Dipam said in a notice.
The government holds a 75 per cent stake in RCFL and intends to divest 10 per cent of the paid-up equity capital through an offer for sale (OFS).
The merchant banker will be required to advise the government on the timing and the modalities of the OFS, ensure best return from the government and assist in securing approval and exemptions, wherever necessary, from regulatory agencies.
Shares of RCF closed at Rs 54 apiece on Friday. At the current market price, the 10 per cent stake sale would fetch about Rs 300 crore to the exchequer.