Divestment dates in tranches
The Financial Express, February 3, 2004

The ministry of disinvestment (MoD) has recommended the prioritisation of the sale of government equity in six companies, the transactions of which should be completed in the current fiscal.

According to sources, the government intends to sell its residual equity in Indian Petroleum Corporation Ltd (IPCL) and CMC Ltd. This will be followed by the sale of 20 per cent government equity in Dredging Corporation of India (DCI) and the offloading of its residual stake in IBP Co. The sale of 10 per cent equity of Oil & Natural Gas Corporation (ONGC) and Gail comes next.

The government had privatised IPCL in favour of Reliance, and CMC in favour of the Tatas in 2002. In the same year, Indian Oil Corporation had acquired a controlling stake in IBP.

In the cases of DCI, ONGC and Gail, the government is going for minority stake sales.

The MoD will recommend prioritisation of the disinvestment in the six companies to the group of ministers (GoM), which will take the decision. The GoM comprises the ministers of disinvestment, finance, heavy industries and administrative ministries. The recommendation of prioritisation was the outcome of a meeting on Monday the MoD officials held with lawyers and bankers associated with the six transactions.

The MoD will also recommend the reservation of 5 per cent Gail shares to be offloaded in favour of the company employees. In the case of ONGC, a 10 per cent quota has been recommended for the employees. However, there would be price preference for the employees. In the case of strategic sales, the employees are given part of the equity at a discounted price.

According to a time-table prepared by MoD, the public issue for IPCL will open on February 16 and CMC on February 17. This will be followed by the public issues for IBP and DCI. ONGC and Gail public issues will come out in the third stage, the date for ONGC being March 2 and for Gail, March 23.

It may be recalled that the divestment target for this fiscal is Rs 13,200 crores, while only a fraction of that has been realised. The government hopes to complete the transactions in the six companies in the current fiscal, so that the feel-good factor does not receive any hit.