New Delhi, Jan 2 (IANS) With the near impossibility of the government completing privatisation of Air India, Bharat Petroleum Corp (BPCL) and Container Corporation of India (Concor) by the end of FY20, it is staring at Rs 60,000 crore budget gap despite planning to line up ‘offers for sale’ (OFS) to garner at least Rs 40,000 crore divestment proceeds.
While there may not be lack of interest for BPCL or Concor; disinvestment of Air India, due to Rs 60,000 crore debt, doesn’t look so promising even the next year.
Earlier in the day, a DIPAM official said in Mumbai the stake sale of Air India, BPCL and Concor might be difficult in FY20.
The Shipping Corporation stake sale may go through, but it is likely to fetch just Rs 1,800-2,000 crore.
The government has garnered only Rs 18,022 crore from selloffs, which is way behind the Rs 1.05 lakh crore target.
To make up for the Air India, BPCL and Concor disinvestment before March 31, sources said the Finance Ministry was weighing OFS for few profit-making public sector firms to at least achieve 50 per cent of the disinvestment target.
Though not finalised, these could include National Aluminium, Coal India, NTPC, NMDC, and NBCC (India), the official said. Bharat Electronics, National Fertilizers and Hindustan Copper were also on the list. The government’s shareholding in these companies is in the 52-82 per cent range.
Timeline is set to play a major role. The Disinvestment Department may issue EoIs (Expressions of Interest) by end of January for Air India and by mid-February for BPCL. But the due diligence may take four-five weeks for responding to EoIs. The prospective bidders could seek more time for due diligence since it involved huge assets and funds, sources said.
In case of BPCL and Concor, another set of rules too could come in the play. “If it triggers an open offer for minority shareholders as per Sebi (Securities and Exchange Board of India) guidelines in the listed companies, like BPCL and Concor, the process will get delayed by another five-six weeks. After that the successful winner will have to get clearance from the Competition Commission of India. Only after that it will transfer the money to the government account,” said a source.
While the government plans to sell entire 100 per cent stake in Air India, it will divest its total 53.29 per cent stake in BPCL and 30.8 per cent stake in Concor of the 54.8 per cent stake.