The Hindu : Initial bids for Manganese Ore divestment soon

Online edition of India's National Newspaper
Tuesday, Mar 04, 2003

Business

Business

Initial bids for Manganese Ore divestment soon

NEW DELHI MARCH 3. The Central Government is expected to invite initial bids for sale of majority stake in Manganese Ore India (MOIL) by next week.

The move follows a meeting of inter-Ministerial group on disinvestment recently, which approved a plan to call expression of interest (EOI) by March 9-10, official sources said.

The meeting also set a timeframe of five months to wrap up the process of privatisation of the company.

The Centre at present owns 82 per cent stake in the manganese major while Mahrashtra and Madhya Pradesh governments hold the remaining stake. KPMG has been mandated to act as global advisors.

The Government proposes to dilute its stake to 26 per cent through a strategic sale while reserving 4.57 per cent for employees.

Incidentally, the Madhya Pradesh Government has also approached the Centre seeking a tag along right to divest its 8.81 per cent stake in the company.

The meeting also deliberated on the issue of employees bid for acquiring stake in the company but did not arrive at a decision on the matter.

Employees had earlier approached the Centre seeking to buy-out its equity at reserve price.

However, the issue was held up on whether the Government could permit such a takeover given the preference for open competitive bidding.

Incidentally, the meeting did not discuss the issue of fixing a figure for net worth and turnover for prospective bidders leaving the matter to be decided in consultation with advisors.

It is also reported to have discussed the issue of whether the company would fall within the purview of natural asset companies, guidelines for which are in the process of being finalised by the Union Disinvestment Ministry and Finance Ministry.

MOIL is involved in mining of manganese ore and production of grades of manganese dioxide from various mines in Madhya Pradesh and Mahrashtra.

It has staff strength of 7,500 employees and an equity base of Rs. 15 crores. The company posted a net profit of Rs. 102 crores in 2000-01. — PTI

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