• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

NEW DELHI, Sept. 26

THE Government on Thursday moved a step closer towards freezing the transaction documents for the strategic sale of 51 per cent stake in Shipping Corporation of India (SCI) with the inter-ministerial group on disinvestment discussing several issues relating to the deal.

The meeting focussed on mortgage of shares purchased by the strategic buyer with foreign lenders, put and call option, delisting of SCI from the bourses following the mandatory 20 per cent open offer and the delinking of the Maritime Training Institute (MTI) from SCI, sources said.

In the case of default in repayment of loans, a foreign lender may not be allowed to sell/transfer the shares mortgaged with him to another foreign investor as long as the shareholders agreement between the Government and the strategic partner subsists.

As per the draft transaction documents, the new strategic partner cannot sell any of the 51 per cent stake acquired by him from the Government for a period of three years. This clause will be dovetailed with the clause on a ban on sale of shares by the foreign lender in case of default by the strategic partner. The Government has stipulated that a foreign entity can hold a maximum of 25 per cent equity in SCI out of the 51 per cent being put up for sale.

The meeting is understood to have decided that the residual Government holding in SCI would remain at 26 per cent and that the question of delisting the company's shares from the bourses would depend on the quantum of shares tendered during the open offer.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
Kishore wants `peaceful co-existence' with Mallya

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line