Govt defers ITDC sell-off till 2002

SEPT 7: The government has deferred disinvestment in India Tourism Development Corporation Ltd ITDC till January 2002.ITDC was targeted ...

SEPT 7: The government has deferred disinvestment in India Tourism Development Corporation Ltd ITDC till January 2002.

ITDC was targeted for privatisation this fiscal by the department of disinvestment DoD. But the ministry of tourism seen to be delaying privatisation of the corporation. The ministry, for instance, sat on the mandate letter to be issued to the global adviser.

However, Lazard India Ltd was later appointed as global adviser for privatisation. In fact, the DoD was also empowered to appoint global advisers for the purpose of divestment. But the department still decided to defer the sale of ITDC to the next fiscal, said official sources.

As per the new schedule of the DoD, the process of finalisation and due diligence by the adviser will be done only in December this year. The advertisement for inviting bids would take another three months. By the end of this fiscal, only short-listing of bidders is expected to be completed.

The department hopes to get clear the other step8211;like finalisation and signing of shareholders8217; agreement, the cabinet nod and Sebi approvals8211;during 2001-02.

It may be recalled that the erstwhile Disinvestment Commission had put ITDC in the non-core category and recommended sale of 74 per cent or more government equity. The commission had also suggested suitable restructuring of ITDC operations for the purpose of divestment.

The restructuring involved handing over hotels situated in prime locations like Delhi and Bangalore to the established hotel chains through a competitive bidding process on long-term structured contract on lease-cum-management basis.

Story continues below this ad

quot;This will mainly take care of the problems of transfer of property in case of lease-hold lands on which the hotels are situated,quot; the sell-off panel recommended. quot;It would be ideal if a tripartite agreement between ITDC, trade unions and the concerned parties is concluded in each case to take care of the interests of the labour.quot;

For other hotels, demerger into separate corporate identities was recommended by the panel. quot;The disinvestment in the new companies will be through sale of 100 per cent government share holdings in them.quot;

The authorised capital of ITDC is Rs 75 crore and paid-up capital is Rs 67.52 crore. The government holds 89.97 per cent of the shares and the general public, 10 per cent. The rest of the loss-making corporation is held by employees.