Govt revives selloff, okays 5% stake sale in NTPC
TIMES NEWS NETWORK New Delhi: The disinvestment process, which had been put on the backburner during the UPA’s first term, is set to resume with the government on Monday clearing sale of equity in power generation utilities NTPC and Satluj Jal Vidyut Nigam (SJVN), a joint venture with Himachal Pradesh government. The Cabinet Committee on Economic Affairs decided on Monday that the government would reduce its stake in NTPC by 5% by selling part of its holding and would also sell 10% of SJVN’s equity through a public offering. The proposals stem from the vision of the UPA-2 to increase “public ownership’’ in staterun firms, a recurring theme outlined in the President’s address to Parliament, the Economic Survey and the finance minister’s Budget speech. The government plans to cut its stake in all listed entities to 75%, which is market regulator Sebi’s norm. The government’s current holding in NTPC is 89.5%, which will drop to 84.5% after the proposed sale. * NTPC stake sale to mop up Rs 8.8k cr? * New Delhi: Power ministry officials said the sale of 5% of the government’s equity in NTPC is likely by December. At the current market price, it would mop up about Rs 8,800 crore. The government plans to cut its stake in all listed entities to 75%, which is market regulator Sebi’s norm for listed companies. This would require the government to divest its stake in a host of companies including Engineers India, National Aluminum, National Fertilizers and Rural Electrification Corporation. In a statement, the government said that following the divestment of government’s stake in NTPC, the firm’s share price is likely to go up, which would help the company raise resources in the international market on competitive terms. In 2007, NTPC had sought permission from the government to raise Rs 6,000 crore from the international market, but couldn’t do so because of opposition from Left parties to any lowering of the government’s stake in navratna PSUs. The government had then decided not to divest its stake directly or indirectly in navratna companies. As it will be the government that will sell its stake, the proceeds will go to the exchequer and be parked in a fund to finance social sector schemes. “To make it (the selloff) inclusive and participatory, part of the shares will be offered to the employees of the state-run firms,’’ commerce minister Anand Sharma told reporters. The stake sale in SJVN will bring down the Centre’s holding from 75% at present to 65%. The Himachal Pradesh government holds the remaining 25% of equity in the joint venture. SJVN operates a 1,000 MW hydel project at Nathpa-Jhakri in Himachal Pradesh. TNN --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
