rediff.com: CCD to decide on MUL divestment on Tuesday, IPCL to wait

The Cabinet Committee on Divestment will meet on Tuesday to finalise the divestment of government equity in Maruti Udyog Ltd. However, the issue of the sale of stake in Indian Petrochemicals Corporation Ltd will not come up for consideration.

When contacted, Divestment Minister Arun Shourie said: "Only Maruti issue will be taken up at CCD tomorrow."

He did not give the reasons for CCD not taking up finalisation of the bidder for 25 per cent stake in IPCL.

Indian Oil, Reliance and Nirma have submitted their financial bids for acquiring controlling stake in IPCL.

Meanwhile, Suzuki Motor Corp, the government's partner in Maruti, said in Tokyo that it was unaware of the reported plans by the Indian government to hand it majority control of the joint venture.

"The government has been saying they want to privatise it, but other than that, we don't know," said Suzuki spokesman Takeaki Nukii.

The CCD had earlier decided to lower government stake in Maruti by not participating in the Rs 4 billion rights issue in exchange for control and renunciation premiums.

Sources said that government stake is likely to come down by about 4 per cent through this route and it would be followed by a public offer wherein Indian partner would lower its holding to 25 per cent in the auto joint venture.

Despite receiving the financial bids last month and having determined the reserve price earlier this month, the divestment ministry has not circulated the IPCL divestment proposal in the CCD note for Tuesday's meeting, sources said.

They, however, added that a meeting of the inter-ministerial group on IPCL would have to be convened for opening the financial bids before the issue was taken up by core group of secretaries on divestment and CCD for final approval of the strategic partner.

Sources indicated that CCD might also take up a proposal for approval for sale of IPCL's 50 per cent stake in General Electric Plastics India to its joint-vetnure partner G E Plastics of Netherlands.

G E Plastics India, which has a plant near IPCL's Vadodra unit and has a development centre in Gurgaon, blends compounds of polycarbonates, alloys and components of engineering plastics.

The sale of IPCL's stake in the JV is likely to fetch around Rs 170-180 million, sources said.



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