SAIL ready to undergo disinvestment

Nirupam Banerjee says............

SAIL ready to undergo disinvestment
The Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of divestment of 10 percent of government’s equity in Steel Authority of India Limited (SAIL). The company is also planning to raise 10 percent equity. The modalities are yet to be finalised but the divestment process is likely to fetch Rs. 16000-17000 crore. Both the processes of divestment and raising equity are targeted to be completed within this financial year.
After the divestment the government stake in SAIL would go down to 69 percent. The government and the company expect to make around Rs. 8000 crore each (calculated on current share prices of the company) through the divestment and the Further Public Offer (FPO). The whole process is going to be executed in two parts. In each part there will be a 5 percent FPO and 5 percent sale of government equity. This will be the first disinvestment in the current fiscal year.
Earlier three profit making central government public sector units, National Thermal Power Corporation, Satluj Jal Vidyut Nigam Limited and Rural Electrification Corporation Limited had been divested. In 2010-11, the government has targeted revenue of Rs.40000 crore from the divestment of its stakes in public sector undertakings (PSU’s).