NEW DELHI, JAN 13: The Government today approved sale of part of its equity in six cash-rich Public Sector companies, including Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC) through buyback or cross-holding, to meet the disinvestment target of Rs 5000 crore during 1998-99.Other Public Sector Units (PSUs) in which disinvestment has been cleared by the Cabinet are Gas Authority of India (GAIL), Mahanagar Telephone Nigam (MTNL), Videsh Sanchar Nigam (VSNL) and National Aluminium Company (NALCO), an official spokesperson told reporters here.Sale of upto 12.5 per cent of Government equity has been cleared in ONGC, upto 10 per cent equity sale in IOC and GAIL, upto five per cent sale in the two telecom giants, and part disinvestment in NALCO.The Cabinet also decided to replace the group of ministers on disinvestment with a Cabinet Committee under the chairmanship of the Prime Minister Atal Bihari Vajpayee to speed up the process.The Cabinet Committee would comprise of Finance Minister Yashwant Sinha, Industries Minister Sikander Bakht and the Minister of the Administrative Ministry.Pricing of shares would be decided by the Cabinet Committee on the recommendations of the core group of secretaries on disinvestment.ONGC, IOC and GAIL are expected to go for disinvestment through cross-holding of equity of each other, while MTNL and VSNL is likely to opt for buyback of shares.According to a proposal submitted by these oil companies, ONGC and IOC would buy 10 per cent stake from each other, while GAIL would pick up 2.5 per cent of ONGC. IOC and ONGC would take five per cent stake each in GAIL.Disinvestment in NALCO could either be through buyback or cross-holding.The board of directors of MTNL and VSNL have already approved buyback of shares.ONGC and IOC which have free reserves of upwards of Rs 30,000 crore, have also proposed to buy out equity on the basis of an average market price of the past 30 days.GAIL which has proposed to pick up 10 per cent equity in ONGC, is buying only 2.5 per cent, as it has limited surplus.At present, the Government holds 96.58 per cent in GAIL, 91.14 per cent in IOC, 96 per cent in ONGC, 56.2 per cent in MTNL, 65 per cent in VSNL and 87 per cent in NALCO.If the Government goes ahead with the disinvestment proposals in the current year, it is likely to mop up more than the targeted Rs 5000 crore.
