The Hindu Business Line : Iranian co agrees to sell stake

THE decks have been cleared for the Government to proceed with the disinvestment in Madras Fertilizers Ltd with the foreign partner, National Iranian Oil Company, also agreeing to sell its stake in the company along with the Centre.

In a communication to the stock exchanges , on Thursday, Madras Fertilizers Ltd (MFL) said that an agreement was signed between the Government of India and the National Iranian Oil Company on May 27, under which NIOC would disinvest all its shares in MFL along with the Centre's shares in the first tranche of disinvestment.

This move is expected to expedite the disinvestment process and also get a better price for the shares.

As per the schedule of disinvestment, the Government wants to bring down its stake in MFL to 26 per cent from the present level of 59.50 per cent. NIOC holds 25.77 per cent equity in MFL.

The communication said that the Fertiliser Formation Agreement dated May 14, 1966 and the supplementary agreement dated December 3, 1996 would be abrogated on the day the entire shareholding of NIOC was transferred to the strategic partner. NIOC had, earlier, been reluctant to sell its shares in MFL.

When contacted, Mr Sukumar N. Oommen, Chairman and Managing Director, MFL, said that following several rounds of discussions, NIOC also agreed to sell its stake in the company at the same price that the Government would sell its shares to the strategic investor. With this agreement between the Centre and NIOC, the disinvestment process was expected to be completed in another four to six months.

Mr Oommen felt that NIOC either by itself, or through a special purpose vehicle, could consider acquiring the Government's shares in MFL, as the company was fundamentally strong with a good marketing network and an established brand.

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