Vsnl Once Again Defers Gdr And Equity Issues
The core group has the cabinet's mandate to manage the first two rounds of PSU disinvestment in the current year.
The two issue managers are the same ones that had been selected by the former Union communications minister Sukh Ram amid controversy for VSNL's aborted $1 billion GDR issue in 1994-95. The issue was shelved almost on the eve of its launch.
VSNL's decision not to go ahead with the GDR-cum-public issue has put the core group in a quandary. For one, the group, which reportedly selected the two global managers after a "beauty contest" -- an euphemism for a selection process based on presentations -- seems to have suddenly realised that its choice of issue managers could lead to another controversy.
Secondly, the last round of disinvestment has clearly proved that a better price could be realised when the offering is laced with expansion plans in the PSU concerned. Auction of government stock in a PSU does not bring in as much.
"From the point of view of saleability, an equity offer to fund expansion has a better response when you seek public money. Publicising the fact that the government is auctioning its stock to bridge its fiscal deficit does not have the same attraction," sources said.
Clearly unwilling to toe the core group line, VSNL has said it has adequate funds to meet its requirements in the current financial year and doesn't have to go in for a public issue now.
VSNL is only one among several PSUs reluctant to go along with the government's coffers-filling exercise. The Oil PSUs, in a recent presentation to the finance minister, clearly indicated that they were unwilling to oblige the government by timing their public issues to suit the government's revenue requirements. "That reduces the whole exercise to a revenue raising exercise," these sources said.
The core group -- consisting of the finance secretary, the expenditure secretary, the secretary in the department of public enterprise and the chief economic advisor -- has since been considering the option of co-opting two new members who can be used to persuade the PSUs to fall in line.
These two members are the revenue secretary and the member secretary, planning commission. While the presence of the revenue secretary is considered desirable "on account of the revenue implications of the disinvestment process," the planning commission is expected to play a more persuasive role in convincing the PSU chiefs to go by the government's disinvestment programme.