Core secretary panel set to take up Shipping Corporation disinvestment


The cabinet secretary-headed core group of secretaries on divestment will, on Monday, take up the issue of preliminary information memorandum (PIM) and expression of interest (EoI) for of that may include conditions such as a one-year lock in period and a three-year business continuity plan.


The panel of secretaries will discuss conditions laid out for the privatisation, and suggest changes if required, said a top government official. The PIM and EOI are then expected to be taken by the alternative mechanism on strategic divestment on December 18, and will subsequently be made public. The alternative mechanism consists of the finance minister, the minister for road transport and highways, and the minister representing respective administrative departments.



Once approved, this would kick-off of yet another public sector unit, besides the Bharat Petroleum Corporation. The sale, if completed in the current fiscal year, may help the government mop up divestment receipts at a time when its revenues are strained, and it’s set to miss its ambitious divestment target of Rs 2.1 trillion.


The conditions of the sale may include eligible bidders having a minimum net worth of Rs 2,500 crore. The final decision on the net worth eligibility will be taken by the panel and subsequently by the political executive, the official quoted above said.


The market capitalisation of the company that owns a fleet of bulk carriers, crude oil tankers, container vessels, among others, was Rs 3,910 crore as of December 11. About 63.75 per cent stake held by the government in the shipping company was valued at Rs 2,492 crore, according to the closing price of the stock on Friday.


The PIM may also include a one-year lock in period for the new buyer, and a business continuity plan or keeping the company as a going concern for a period of three years. The new buyer will also have to retain existing employees for a year, the official said.

Dear Reader,

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.

Digital Editor





Source link

Leave a Comment

Your email address will not be published. Required fields are marked *