Financial Daily from THE HINDU group of publications
Friday, Aug 02, 2002
Industry & Economy
Punjab to sell entire stake in Puncom
NEW DELHI, Aug.1
THE Congress Government in Punjab is following what Mr Arun Shourie, the Union Disinvestment Minister, is doing at the Centre, perhaps even more aggressively.
The State Government has decided to sell the entire stake of 69.7 per cent held by Punjab State Electronics Corporation in Punjab Communications Ltd to a strategic buyer.
"The Cabinet Committee on Disinvestment of the Punjab Government at a meeting held on July 27 decided to exit completely from Puncom by selling the entire 69.7 per cent stake held by PSEC in the company to a strategic buyer,'' Ms Vinni Mahajan, Director, Disinvestment Directorate, Punjab Government told Business Line.
The CCD also approved the appointment of SBI Caps to act as global advisors to the deal, Ms Mahajan said. The State Government would soon invite expressions of interest (EoI) from bidders interested in acquiring Puncom.
The CCD further decided to stipulate a net worth of Rs 100 crore either singly or in a consortium as pre-qualification criteria for bidders in order to be eligible for bidding for Puncom, Ms Mahajan said.
The State Government was earlier planning to sell 44 per cent of PSEC's equity in Puncom to a strategic partner while retaining 26 per cent in the company.
"But, after detailed discussions, the CCD decided to sell the entire stake held by PSEC in Puncom in view of the fact that this would provide greater operational freedom and greater value to the bidders,'' Ms Mahajan said.
Despite withdrawing totally from Puncom, the State Government would incorporate standard clauses in the shareholders agreement on protecting the interests of the employees and to prevent asset stripping by the strategic buyer. "This would be sufficient to take care of the interests of the employees as well as that of the Government,'' Ms Mahajan said.
Puncom has a net worth of Rs 182 crore and is a debt-free company since 1995. The company's book value stands at Rs 113 per share.
Meanwhile, the State Government has invited EoIs for appointing global advisors to carry out the strategic sale of Punjab Alkalies and Chemicals Ltd (PACL) and Punjab Tractors Ltd (PTL).
The last date for submission of EoIs by merchant bankers for PACL is August 23 while that of PTL is August 28. "Within two weeks of the submission of EoIs by merchant bankers, the advisors would be in position. Thereafter the process of strategic sale in PACL and PTL would start,'' Ms Mahajan said.
In the case of PACL, the Punjab Government will sell the 44.26 per cent stake held by Punjab State Industrial Development Corporation (PSIDC) in the company to a strategic partner along with transfer of management control.
In PTL, it will sell PSIDC's shareholding of 23.49 per cent in the company to a strategic buyer along with management control.
Ms Mahajan said the Government would discuss the issue of offloading the stake held by UTI (18.18 per cent), IDBI (9.06 per cent), mutual funds (2.28 per cent), LIC (10.22 per cent) and foreign institutional investors (12.86 per cent) in PTL simultaneously with the strategic sale.
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