Cabinet Committee on Economic Affairs on Thursday deferred a decision on divesting 10.82 per cent government stake in Steel Authority of India Limited (SAIL) as Steel Minister Beni Prasad Verma was away on an official tour.
Sources said since the minister was in Tokyo to attend an agreement signing event between SAIL and Japan’s Kobe Steel, the CCEA did not think it to be prudent to take a call on the matter. Steel Secretary D.R.S. Chaudhary is also in Tokyo.
The follow-on public offer in SAIL is expected to fetch around Rs. 4,000 crore to the government. Mr. Verma’s absence was the only reason for Cabinet deferring the proposal, they said.
Mr. Verma set out for Tokyo on July 8 and is scheduled to come back on Thursday. On July 10, SAIL and Kobe Steel had signed the final pact for an equal joint venture aimed at setting up a 500,000 tonne iron nugget manufacturing plant in West Bengal entailing an investment of Rs 1,500 crore.
The proposal for divestment of government’s stake in SAIL before the CCEA was put up by the Department of Disinvestment.
The government plans to dilute 10.82 per cent of its 85.82 per cent stake in the company aimed at mopping up around Rs 4,000 crore.
A DoD note for the CCEA stated that the Offer for Sale route would be taken for the stake dilution in the company.
It, however, did not indicate a specific time-frame for the disinvestment as the “time of the issue will depend on market conditions”.