Financial Daily from THE HINDU group of publications
Saturday, Jul 06, 2002
Industry & Economy - Disinvestment
Disinvestment panel clears sale of five ITDC hotels
NEW DELHI, July 5
THE Cabinet Committee on Disinvestment (CCD) on Friday cleared the sale of five ITDC properties and approved the transaction documents for the privatisation of NEPA Ltd while deferring a proposal to privatise Manganese Ore India Ltd (MOIL) in the absence of the Union Steel Minister.
Bharat Hotels Ltd had acquired Hotel Khajuraho Ashok for a consideration worth Rs 2.21 crore while a consortium of Ramnath Hotels Private Limited had bought the Hotel Varanasi Ashok property for Rs 9.11 crore, the Union Minister for Disinvestment, Mr Arun Shourie, said here after the CCD meeting.
Nehru Place Hotels Ltd won the bid for acquiring Hotel Kanishka for Rs 95.95 crore and Hotel Indraprastha was acquired by Moral Trading & Investments Ltd for Rs 45.03 crore.
ITDC's unfinished property at Chandigarh was awarded to Taj GVK Hotels & Resorts Ltd for Rs 17.27 crore.
Mr Shourie said that the bid price was inclusive of the upfront payments to be made by the successful bidders towards specified liabilities on account of VRS compensation, including gratuity to be paid to the employees who have opted for VRS as well as other liabilities.
The CCD has decided to sell about 72 per cent equity in NEPA Ltd while retaining 26 per cent stake in the company. It also approved a financial restructuring package for the company which involves the conversion of th ebalance of non-Plan assistance of Rs 28 crore as well as the conversion of the outstanding normal interest of Rs 6.05 crore on non-Plan assistance as on March 31, 2002 into equity and waiver of the balance amount of penal interest of Rs 1.60 crore standing on that date.
"With the above concessions/reliefs and after effecting certain accounting adjustments to be made by NEPA Ltd in its books, the status of net worth of the company as on March 31, 2002 would be Rs 4.53 crore as against the provisional figure of (-) Rs 38.06 crore'', Mr Shourie stated.
The CCD also approved the shareholders and share purchase agreements for the sale of NEPA and directed the Disinvestment Ministry to invite financial bid from the lone bidder left in the fray. "Since only one bidder is left in the fray, the Government will calculate the reserve price with great diligence'', the Minister said.
The Union Government currently holds 98 per cent stake in NEPA while the rest is held by the Madhya Pradesh Government and the public.
In the case of MOIL, the CCD decided to defer the proposal in the absence of the Union Steel Minister. "MOIL will be taken up at the next meeting of the CCD and in any case, the Steel Minister has concurred with the general points made in the proposal for privatising the company '', Mr Shourie said.
The Disinvestment Minister said that he had submitted a plan to the Finance Minister, Mr Jaswant Singh, to expedite the process of disinvestment and to meet the target set for the sale of Government equity in PSUs.
"We believe the disinvestment target can not only be achieved but also exceeded if various steps are followed", Mr Shourie said.
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