Anxious to boost disinvestment receipts, the Cabinet on Thursday decided to dip into a portion of ‘enemy shares’ in its possession and sell Dredging Corporation of India to a clutch of state-owned port trusts.
The proposed sale of 6.5 crore enemy shares in 996 companies could fetch the government close to Rs 3,000 crore at current valuation. The government holds 73.4% in the Visakhapatnam-based Dredging Corporation, whose market-cap at Wednesday’s close was Rs 975 crore.
So far this fiscal, the government has raised around Rs 15,289 crore via disinvestment, while the target is Rs 80,000 crore. The latest Coal India offer for sale has mopped up just Rs 5,266 crore against some Rs 15,000 crore targeted.
The Enemy Property Act, 1968, provides for the continuous vesting of enemy property with government custodian. Currently, of the 996 companies whose enemy shares are under the custody of state-run CEPI, 588 are functional/ active companies. While 139 of these firms are listed, the remaining are not.
According to a government statement, “the process for selling these shares is to be approved by the Alternative Mechanism (AM) under the chairmanship of finance minister and comprising minister of road transport and highway and home minister”.
The AM will be supported by a high-level committee of officers co-chaired by the secretary, DIPAM and secretary, ministry of home affairs.
DIPAM will appoint mechant bankers/legal advisors for the sale of these assets via open/limited tender process, the government added.
According to the decision taken by the Cabinet committee on economic affairs, government shares in DCIL would be sold to consortium of four ports namely, Vishakhapatnam Port Trust, Paradeep Port Trust, Jawahar Lal Nehru Port Trust and Kandla Port Trust. The strategic disinvestment of DCIL shall be undertaken after conducting due diligence exercise by both the entities with the help of advisers, appointed for the transaction.
Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.
Source: Financial Express