PACL divestment delayed by two more months

The disinvestment of Punjab Alkalies and Chemicals Limited (PACL) is expected to be delayed by another two months. Earlier, the deadline for the disinvestment was October 31 this year. Officials in the Punjab government informed that the cabinet is yet to meet and decide on the fate of the the empanelment of the two companies, which has been referred by the technical committee.

Sources in the government further informed that the meeting was expected to take place in December once Chief Minister Parkash Singh Badal returns from abroad. So, after the cabinet decision only, the disinvestment department will ask the interested companies to submit their financial bids. This would delay the disinvestment process further, they said.

The Punjab disinvestment department had shortlisted 12 of the 14 players that have submitted their request for quotation (RFQ) for diluting entire equity shares of Punjab State Industrial Development Corporation Ltd (PSIDC) in PACL. PSIDC has a 44.26 per cent stake in PACL.

Earlier, Punjab Disinvestment Director V K Singh said, “We have shortlisted 12 players, which had submitted an RFQ document. There were certain discrepancies in the proposal submitted by two players namely Chandigarh-based Nector Lifescience Ltd and DCM Shriram Credit & Investments Ltd. So the matter has been referred to the cabinet and now its up to the cabinet to decide. If they allow these two companies, we will ask all the players to submit their RFP (request for proposal) document in due course of time, otherwise only selected players would be allowed.”

So after the cabinet decision, the department will ask the eligible bidders to submit their RFP. Among the other players who had submitted RFQs and were qualified Grasim Industries Ltd, Nirma Ltd, and DCM Shriram Credit & Investments Ltd were among the 14 companies, submitted their EoI (expression of Interest) for picking up the entire equity shares of Punjab State Industrial Development Corporation Ltd’s in PACL.

The others included Noida-based Jai Prakash Associates Ltd, Chandigarh-based Surya Pharmaceuticals Ltd, Nector Lifescience Ltd, and Bhusan Power & Steel Ltd, New Delhi-based Goyal MG gases Ltd, Punjab -based Kudos Chemie Ltd, etc.

PACL has been running into losses for some time now. Even during the first quarter of the current financial year, the company reported a net loss of Rs 4.86 crore. Further, it reported a net loss of Rs 22.41 crore in the year ended March 2010 as against net profit of Rs 7.12 crore during the previous year ended March 2009. Also, sales declined 24.11 per cent to Rs 153.66 crore in the year ended March 2010 as against Rs 202.48 crore during the previous year ended March 2009.

Besides PSIDC, other stakeholders in PACL include public, corporate bodies, mutual fund, banks, foreign institutional investors (FIIs) having percentage stakes of 35.82, 19.79, 0.06, 0.05 and 0.02 respectively as on June 30, 2010.