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| SAIL divestment next in line; 20% FPO on cards |
| Press Trust of India / New Delhi Oct 20, 2009, 16:46 IST |
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Disinvestment in steel giant SAIL seems to be the next in stake sale in PSUs, with the government considering a two-phase follow-on-public offer (FPO) of the navratna firm, which will fetch the Centre over Rs 8,000 crore at current share prices.
The 20 per cent FPO will be a combination of 5 per cent dilution of government's equity and 5 per cent issue of additional shares in each phase, a senior steel ministry official said.
"Steel minister Virbhadra Singh has already approved the proposal, which has also got in-principle approval of the Disinvestment Department of the Finance Ministry. Now, SAIL is finalising the document which will be presented in its board meeting this week," the official added.
He said: "SAIL will then inform Sebi about the move, after which the ministry will prepare a note to be sent to the Cabinet for its approval. This is likely by December".
Going by the current market value of SAIL, offloading 10 per cent will fetch over Rs 8,000 crore. Since the FPO is a mix of government's stake and issue of fresh equity by the company, the share of the Centre and the company will be Rs 4,000 crore each.
The first tranche of 10 per cent may happen this fiscal, while the next is likely in 2010-11, another official said.
The issue would bring the government's holding down to about 68 per cent from over 85 per cent now.
When contacted, SAIL officials did not comment. Its share prices closed over 4 per cent up at Rs 194.74 on BSE from its previous close.
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