The resurgent ministry of disinvestment is pushing for a meeting of the cabinet committee on disinvestment (CCD) in two or three days to start the privatisation of BPCL, HPCL and Nalco. A likely date is Friday.At one stage, the MoD was a bit diffident about initiating oil sector privatisation in the background of petrol pump scam. But after intense deliberations it came to the conclusion that no purpose is being served by holding up privatisation of BPCL and HPCL, given the present state of high interest among prospective buyers.A senior official said, “we are trying really hard for a CCD meet in two or three days. BPCL and HPCL will be very much a part.” The official discounted fears that contingent (legal) liability or even open-ended liability staring these two oil companies from their dealers—whose allotments have suddenly been cancelled—merits the privatisation to be postponed. “If that’s any argument to delay disinvestment, all that any company has to do is to attract ten legal cases! In Balco or almost every other sell-off the buyer factored ongoing legal proceedings. The real issue is that there’s significant competition in the market for these companies.Legal proceedings aren’t a significant issue,” the official countered. Industry sources confirmed the MoD’s perception that global oil majors are keen to take over BPCL and HPCL. A British oil major has appointed a Mumbai-based Indian firm as investment banker. Another European globo-corp is going through “beauty parades” too. This subtlety is important because so far MNCs have not invested in the disinvestment process in a major fashion. The explanation for their renewed interest is that they are now convinced that the government is serious towards privatisation, the cases in point being VSNL, CMC, IPCL, HZL and Balco.Another big-ticket privatisation is that of Nalco. Here the the government holds 87 per cent shares and divestment is being simultaneously carried out by two routes: offloading 10 per cent equity in the domestic market, 20 per cent as american depository receipts and 26-29 per cent by way of strategic sale. The advertisement calling expressions of interest for strategic sale will be called this week. The ad will explain Nalco’s existing relationship with French MNC Pechiney. As per Sebi guidelines, the strategic buyer will then have to make an open offer.
