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CMC staff rope in Schroder to bid for Govt stake

Vipin Kumar

K.R. Srivats

NEW DELHI, July 11

THE employees of CMC Ltd have roped in Schroder Capital Partners, a venture capital company, to make a joint bid for the Government's 57.31 per cent stake in the public sector infotech major.

CMC sources said the employees are aligning with Schroder Capital to participate in the disinvestment process of CMC in order to satisfy the condition laid down by the Government that the bidders should have a `group networth in excess of Rs 300 crore.'

They confirmed to Business Line that Schroder has agreed to support the employees' consortium for participating in the disinvestment process of CMC.

``We are the people who have nurtured CMC from a Rs 5-crore company to a Rs 500-crore one. We have strong attachment to this company and hence the decision to participate in the disinvestment,'' they said.

The Government intends to divest 57.31 per cent of its 83.31 per cent stake in the company through the strategic sale route.

Public and financial institutions hold the remaining stake.

Besides the employees, a clutch of companies such as Hewlett-Packard Company, Compaq, Wipro, Mascon Global and TCS, are believed to be in the running for CMC.

Meanwhile, the Disinvestment Minister, Mr Arun Shourie, said that the Department of Disinvestment (DoD) is considering a request from the employees for more time to put in their financial bid. The Government is yet to formally invite the bids.

The Minister had earlier stated that CMC would be the first company for which the financial bids would be invited. The Cabinet Committee on Disinvestment had on July 6 cleared the

shareholders' agreement.

CMC sources said the employees consortium has asked for four weeks' more time to prepare themselves to submit their financial bid since Schroder needs such time to further scrutinise some documents.

``Unlike other existing companies, the employees need outside support to bid for the Government stake and are not in a position to put in a financial bid immediately. We need to thrash out many issues with our partner,'' the sources said.

However, they said they were not sure whether the DoD would accept the employees' request for more time and delay the process of invitation of the financial bids.