PFC invites merchant bankers to bid for public offer
Power Finance Corp and has invited bids from merchant bankers for managing the share sale programme.
Going full steam ahead with its disinvestment drive,the finance ministry has formally kicked off the process for the follow on public offer of Power Finance Corp and has invited bids from merchant bankers for managing the share sale programme.
Power Finance Corporation will appoint four merchant bankers who will work as a consortium of book running lead managers for the follow on public offer involving sale of 5 per cent government stake along with issuance of 15 per cent fresh equity by the state run power financier.
At present,the government holds a 89.78 per cent stake in Power Finance Corporation. It had divested a 10 per cent stake through an initial public offer in 2007.
However,concerned by the near zero fees that merchant banks quote for managing prestigious public issues by state run firms,the request for proposal has made it mandatory for interested bidders to quote a figure not less than one rupee.
Failing this,the financial bid would be rejected, the document says.
Last year,the Power Finance Corporations board had approved a proposal for fresh issue of equity shares not exceeding 20 per cent of its existing paid up capital. However,it is still not clear when the company will be hitting the market with its public offer.
The government may schedule it for February March or could push it back to the first quarter of the year 2011-12.
It is very fluid right now. It will depend on other planned stake sales and how much of the Rs 40,000 crore target from disinvestment proceeds we are able to achieve, an official said.
Interested banks have however been asked to place their bids by January 14. The finance ministry will take the proposal for a follow on public offer by Power Finance Corporation to the Union Cabinet by end of this month.
Other companies on the disinvestment roadmap for 2010-11 include follow on public offers by Steel Authority of India Ltd and ONGC Ltd.
Power Finance Corporation is involved in funding power generation,transmission and distribution projects across the country.
The company plans to use the funds raised from the follow on public offer to finance both existing loans,as well as future lending activities.
Share
