Punjab to invite financial bids for PACL disinvestment by this month

The state's Directorate of Disinvestment had in June invited global expression of interest from private players to disinvest 44.26 per cent equity

With disinvestment of state government's stake in ailing Punjab Alkalies & Chemicals Ltd (PACL) top on agenda, the Punjab government will ask the four qualified bidders: Aditya Birla Chemicals (India) Pvt. Ltd, Nirma Ltd, Punjab-based Kudos Chemie Ltd and a consortium of Al Shemail Garments & Perfumes to submit financial bid, by this month.

It is worth mentioning that the state's Directorate of Disinvestment last year in June had invited global expression of interest from private players to disinvest 44.26 per cent equity shareholding of Punjab State Industrial Development Corporation (PSIDC) in PACL through competitive bidding. It has appointed IFCI Ltd as the global advisors for the proposed transaction.

The core group constituted for the disinvestment has approved the prequalification of Aditya Birla Chemicals (India) Pvt. Ltd, Nirma Ltd, Punjab-based Kudos Chemie Ltd and a consortium of M/s Al Shemail Garments & Perfumes Tr.LLC (lead member 90 per cent) & Avenue Chemicals (P) Ltd.

Speaking to Business Standard, a senior official in the government said, "The qualified bidders have already carried out due diligence for the purpose. We will have pre-bid conference shortly, where their queries, if they have any, will be addressed. After redressal of their queries, we will ask them to submit their financial bids within three weeks."

The company's plant is located at Naya Nangal in District Ropar, Punjab (India). It is one of the largest manufacturers of caustic soda in India with an installed capacity of about 99,000 tonnes per annum. The company is engaged in the manufacture and sale of caustic soda (Lye & Flakes), liquid chlorine, hydrochloric acid, sodium hypochloride and hydrogen gas.

Besides PSIDC, other stakeholders in PACL include public (37.52 per cent), corporate bodies (15.78 per cent), mutual fund (0.06 per cent), banks (0.05 per cent), FIIs & NRI (2.33 per cent) as on March 31, 2014.

According to Bombay Stock Exchange (BSE), the company's revenue was Rs s267.43 crore in 2013-14 compared to Rs s288.99 crore in 2012-13.

The company reported net loss of Rs 9.57 crore in the fiscal year 2013-14 against net profit of Rs 2.81 crore during the previous year.

Insiders mentioned that the state government is firm it wants to dilute its undertaking's entire stake in PACL this time. It is pertinent to mention here that this is the fourth time the disinvestment department is undertaking the dilution process.

Initially, it was in 2002, when none of the companies showed interest in purchasing the stake and later on in 2005, due to the change of government disinvestment could not take place.

The third attempt was done in 2010 when the state government received only one bid, which was also not in order out of the 13 shortlisted companies, so it was deferred.