SCI invites merchant bankers to manage 20% stake sale

State-owned Shipping Corporation of India (SCI) today said it has invited merchant bankers to manage the 20 per cent stake sale of the company, which is expected to garner over Rs 1,000 crore.

The government plans to sell 10 per cent of its stake in the company, while the firm will issue additional shares equal to 10 per cent, through a follow-on public offer, according to a Finance Ministry statement.

SCI currently has 42.34 crore total shares, of which the government holds 80.12 per cent and the remaining is with the public.

At the current share price of Rs 164, the stake sale of around 8 crore shares would fetch the government and the company over Rs 1,000 crore.

The company will select and appoint up to three merchant bankers with requisite experience in public offerings.

"SCI intends to initiate the work relating to appointment of Book Running Lead Managers (BRLM) and other intermediaries to prepare a DRHP or RHP and to undertake other related activities. However, the DRHP or RHP would be filed with Sebi only after CCEA approval is received," it said.

The statement further said the merchant bankers would advise SCI on the timing of the FPO to ensure the best returns to the company and the government.

SCI has stipulated that the BRLM candidates should have handled at least one domestic equity issue of the size of Rs 200 crore or more during the last three financial years and the current financial year.

The bidders are required to submit their applications by August 24, 2010, the statement said, adding that the brokerage fee will be 0.35 per cent for retail and 0.15 per cent for high net-worth individuals, which will be borne by SCI.