Central govt. to privatise 13 firms this fiscal

By : |September 28, 2001 0



By Unni Krishnan

NEW DELHI: India said on Thursday it would sell government stakes in 13
state-run firms in the current financial year in a bid to breathe life into its
faltering privatization program. Disinvestment Minister Arun Shourie told
reporters after a three-hour meeting of the privatization panel headed by Prime
Minister Atal behari Vajpayee that a timetable for selling the stakes in the 13
firms had been finalized.

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The companies identified for privatization include CMC Ltd. , Hindustan Zinc,
Hotel Corporation of India, Hindustan Teleprinters, India Tourism Development
Corporation, IBP Co., Indian Petrochemicals Corp Ltd., car-maker Maruti Udyog
Ltd. and telecoms firm Videsh Sanchar Nigam Ltd. among others.

“Each administrative ministry will be responsible for adhering to the
time schedule. We will report to the cabinet committee on disinvestment every
month on the time-table,” Shourie said. India’s latest push for its
privatization program comes at a time when the global economy and markets are in
turmoil following the deadly attacks on the United States.

Analysts say the government will be unable to make much headway under the
current situation and would again fall way short of its target of raising Rs 120
billion in the current financial year through the sale of stakes in state-firms.
Earlier this month the government’s ambitious plans to sell 40 per cent of its
stake in the state-run long-haul carrier Air India were virtually grounded after
the high profile Singapore Airlines pulled out of the consortium bidding for the
stake.

Blow to privatization

Air India is now left with only one bidder – India’s salt-to-software
conglomerate Tata group and analysts believe that the government is unlikely to
go ahead with the sale. The government had earlier identified 27 firms for
privatization in 2001/02, but six months into the financial year it has been
forced to lower its expectations by pruning the list after being unable to shed
its stake in any firm.

Shourie said the government had received two financial bids for 74 per cent
stake in Hindustan Teleprinters Ltd. (HTL) and would final invite bids for
software and computer maintenance company CMC on Friday. He said the
privatization panel would meet again on October 1 to assess the bids for HTL and
CMC. The government that owns 80 per cent of CMC, plans to sell 57.3 per cent to
a combination of investors including employees.

Domestic media reports say that only four bidders now remain in the race for
a stake in CMC. They are India’s largest software exporter Tata Consultancy
Services, Wipro Ltd., India’s No. 3 software exporter, US computer major
Hewlett-Packard and the local petrochemicals group Reliance. CMC’s shares closed
at Rs 312.05, up 48.85 on Thursday at the Bombay Stock Exchange. The panel also
decided to sell 1.97 per cent equity in VSNL and 6.31 per cent in CMC to
employees at one-third of the market price, but the shares would be only be
transferred after privatization of the two firms.

(C) Reuters Limited 2001.

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