Non core assets of the company are being hived off and will not be a part of the sale.
The government had approved strategic divestment of the company in November last year along with proposed privatisation of Bharat Petroleum Corporation Ltd and Container Corporation of India. The sale, if completed this year, would give some cushion to the government in divestment receipts as the Covid-19 pandemic has derailed its stake sale and privatisation plans. The government’s 63.75 per cent stake in the company was valued at Rs 2,535 crore.
The buyer, interested in acquiring the shipping company, must have a net worth of Rs 2,000 crore, and should have reported positive operating profit in at least three out of the last five financial years. Any public or private company, SEBI registered Alternative Investment Fund, or a company or fund incorporated outside India, is eligible to bid for the company. Employees can also participate in the transaction independently or by forming a consortium. Employees will have to incorporate an entity to complete the transaction that would be required to make 10 per cent contribution towards the financial bid.
Public sector companies
are not eligible to participate in the transaction.
The buyer will be required to undertake obligations relating to employee protection, retirement policy including VRS, asset stripping, business continuity, lock-in period for shares, bearing Indian flag on vessels, which will be specified in the share purchase agreement. The company had 3,281 employees as on December 1, 2020.
Shortlisted bidders wanting to acquire the firm will receive RFP draft share purchase agreement in the second stage. Then financial bids will have to be submitted post after which a reserve price will be set. The highest bidder will be required to make an open offer to public shareholders to acquire a minimum of 26% shares of the company. The open offer cannot be made conditional on any minimum level of acceptance.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.