Financial Daily from THE HINDU group of publications
Friday, May 24, 2002
Industry & Economy
No discount in Nalco equity sale
NEW DELHI, May 23
THE Government will not offer any discount when it hawks 10 per cent of the equity in National Aluminium Company Ltd (Nalco) to institutional investors, high net worth individuals and retail investors domestically during the first stage of the disinvestment process, set to be flagged off-soon.
The 10 per cent domestic offering in Nalco, comprising 6.6 crores worth of shares, is expected to rake in an amount in excess of Rs 500 crore to the Government, officials said. The price of the domestic offering will be determined through the book-building process.
"The quantum of shares to be sold to institutional investors, high net worth individuals and retail investors will depend upon the market appetite," the official noted.
The Government will soon appoint a global co-ordinator-cum-advisor who would be common to all the three stages of the divestment plan in Nalco 10 per cent domestic offering followed by a 20 per cent ADR issue and a 29.15 per cent strategic sale. There will an additional book runner each for the domestic as well as the ADR issues.
"The Government will start the process of domestic offering and the ADR simultaneously as an ADR issue will take more time," the official said.
The process of disinvestment in Nalco has been delayed after the former Union Mines Minister, Mr Ram Vilas Paswan, said the company would not be privatised. This had led to a flurry of correspondence from the workers and even the Orissa Government, which views Nalco as one of its prime jewels. The Ministry of Disinvestment is trying to undo the damage done by Mr Paswan.
The Secretary, Ministry of Disinvestment, Mr Pradip Baijal, will visit Nalco on Friday to allay the apprehensions of the workers and the State Government on disinvestment in the company.
Global aluminium majors seeking to pick up Nalco's equity during the ADR offering would also be told that the Government would not provide any preference to them when the strategic sale takes place later.
"They will have to pick up Nalco's equity during the ADR issue without being accorded any special privileges during the strategic sale, which would be carried out through a competitive bidding process," the official said.
The ADR offering in Nalco would be the first direct ADR float involving a Government company.
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