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Rs 600-cr excise claim on IPCL goes

P. Manoj

NEW DELHI, April 9

THE Excise Department has withdrawn a Rs 600-crore excise claim on privatisation-bound Indian Petrochemicals Corporation Ltd (IPCL), giving a bonanza to the bidders keen on acquiring a 26 per cent controlling stake in the petrochemicals major.

"This is a big upside to the bidders and the Government. Otherwise, the contingent liability worth around Rs 600 crore on account of excise claims would have depressed the price to be quoted by the bidders '', Government sources said.

The Government will now invite price bids from the bidders, having resolved all the outstanding issues connected with the privatisation of IPCL.

Last week, the Ministry of Disinvestment had sorted out the critical gas supply and pricing issue with the Ministry of Petroleum and Natural Gas, ONGC and GAIL for IPCL's Nagothane and Gandhar plants.

The Finance Ministry has also agreed to extend guarantee cover to IPCL on a residual IBRD loan of about $ 100 million taken by the company.

"The resolution of all the three issues will have a significant impact on IPCL prices'', the sources said.

Reliance Industries, Indian Oil Corporation and Nirma Industries Ltd are in the fray to acquire strategic control of IPCL.

The share price of IPCL in now hovering around Rs 98 per share on the bourses.

The Government will sent out letters on April 12 inviting price bids from the short-listed bidders who would be given a time-frame of about three weeks to submit their financial bids, the sources said.

The Cabinet Committee on Disinvestment (CCD) is expected to meet in the first week of May to clear the sale of IPCL.

"The conclusion of IPCL deal will also sent out a clear signal to the global investors about the seriousness of India's disinvestment programme'', the sources said.

Significantly, this will put an end to the privatisation saga involving IPCL which was kicked-off in December 1998 and went through several twists and turns.

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