Govt to bring MFL selloff on track soon

The government had been trying for quite some time to get the consent of NIOC. Disinvestment secretary Pradip Baijal had met the Iranian ambassador in New Delhi.

The Iranian government had appointed KPMG for advice over the issue of MFL divestment. KPMG impressed upon them that it would be in the best interests of NIOC to go along with the Indian government—that is, let it sell its equity in the same fashion as it sells its own to the strategic buyer.

It may be recalled that the Tatas too had given a similar consent in the case of their 10 per cent equity in India Tourism Development Corporation. The Indian government will soon sign a memorandum of understanding with NIOC on tag-along.

The process of MFL privatisation was started about a couple of years back, but it got stuck because of NIOC’s reluctance to allow privatisation. The government had appointed ICICI Securities & Finance Co Ltd and Bank of America as global advisers for MFL sale.

The government holds 58.74 per cent of equity in MFL. It would soon restart the process of selling its 32.74 per cent MFL shares in favour of a strategic partner.

With a paid-up equity of Rs 162.14 crore, MFL incurred a loss of Rs 29.76 crore during 2000-01. Its accumulated losses are in excess of Rs 80 crore.