Panel approves bidding plan for Shipping Corporation privatisation

The ministerial committee on divestment has approved the proposal to invite bids for the privatisation of Shipping Corporation of India. This would push the pedal on government’s drive to privatise state-owned firms that were approved by the government last year.

The expression of interest and preliminary information memorandum have been approved by the alternative mechanism without any changes to the proposed conditions firmed up by Department of Investment and Public Asset Management, said a top government official. The panel includes Finance Minister, Minister for Road Transport and Highways, and minister representing respective administrative department.

These will be made public on Tuesday, and bids will be invited from interested buyers. The roadshows conducted by the government have received good response from interested parties. The government owns 63.75 per cent in the company valued at Rs 2,451 crore as of market closing price on Monday.

If the sale concludes this fiscal year, the government may get some cushion on divestment receipts as the Covid-19 pandemic has strained government’s revenues and toppled the government’s ambitious divestment drive. During the current fiscal year, the government has received Rs 12,380 crore in divestment receipts against the government’s target of Rs 2.1 trillion.

Last week, the Core Group of Secretaries on Divestment headed by Cabinet Secretary Rajiv Gauba had approved conditions for privatisation of the company — that owns a fleet of bulk carriers, and crude oil tankers — that included the new buyer having a net worth a little less that Rs 2,500 crore.

The market capitalisation of the company was Rs 3,845 crore on Monday. The panel has approved this, the official quoted above said.

Other conditions of the sale such as a lock-in period for a new buyer and a business continuity plan will not be a part of the PIM, but will be included in the share purchase agreement, the official said.