Financial Daily from THE HINDU group of publications
Friday, Oct 25, 2002
Industry & Economy - Disinvestment
ADR float: Nalco to file draft prospectus with SEC by Nov 15
NEW DELHI, Oct. 24
FOR the Disinvestment Ministry, it is business as usual on the controversial privatisation of aluminium major National Aluminium Company Ltd (Nalco) and a November 15 date has been set for filing a draft prospectus with the Securities and Exchange Commission (SEC) of the US for the planned 20 per cent American depository receipts (ADR) float of the company's shares.
The SEC is expected to take about a month to give its comments on the draft prospectus.
"If the company agrees to all the comments made by the SEC, the prospectus would be ready for filing by end-December or early January," Government sources said.
The draft prospectus for the ADR float will be filed as soon as the work on converting the accounts of Nalco into the US Generally Accepted Accounting Practices (GAAP) is over by the end of October or first week of November, the sources said.
"The 10 per cent domestic float and the 20 per cent ADR offering will hit the markets by end-January next year and the process will be completed by the end of February," the sources said.
The pricing of the domestic and ADR floats will be determined through the book-building route for which the Disinvestment Ministry will approach the Cabinet Committee on Disinvestment (CCD) with a price band for the scrips.
There will be a little time gap between the domestic and ADR floats as the Government seeks to compress the trading time after the books are closed.
In the US, trading in shares starts immediately after the book is closed as per SEC norms; whereas in India, trading takes a while to commence after closing of the book.
The domestic and ADR offerings will be followed by a 29.15 per cent strategic sale, which rounds-off the three stage disinvestment of Nalco cleared by the CCD.
After privatisation, the Government will be left with a residual stake of 26 per cent in Nalco.
The Disinvestment Ministry is proceeding with the implementation of the CCD decision regardless of the opposition mounted by the Orissa Chief Minister, Mr Naveen Patnaik, the Coal and Mines Minister, Ms Uma Bharati, and the Steel Minister, Mr B.K. Tripathi, to the disinvestment of Nalco.
Global aluminium majors Alcan, Alcoa, Pechiney and domestic majors Hindalco and Sterlite are among those who have filed their Expressions of Interest (EoIs) for acquiring a controlling stake in Nalco.
Ms Bharati had written to the Prime Minister, Mr A.B. Vajpayee, expressing her reservations on the disinvestment in Nalco and is expected to meet him again in the next few days over the issue.
The Biju Janata Dal chief, Mr Patnaik, has sought an emergency meeting of the National Democratic Alliance (NDA) to discuss the policy on privatisation of profit-making PSUs including Nalco amidst pressure from his political opponents from both within and outside the party as well as the workers of the company.
Mr Patnaik also had a tête-à-tête with Mr Vajpayee regarding the Nalco sell-off plan during his visit to Delhi last week to attend the Chief Ministers' conference.
But, for the Disinvestment Ministry, Nalco privatisation is on track as borne out by the sequence of events.
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