Divestment of Salem Steel Plant, a unit of Steel Authority of India Ltd is unlikely to go through this financial year.
A SAIL spokesman said one reason for this was that the bid submitted by the Jindals was yet to be opened.
"A committee comprising SAIL officials has been formed exclusively to deal with the disinvestment of Salem. The committee would determine the modus operandi of the entire process in consultation with the merchant bankers. In fact, the committee is in the process of setting the parameters that are crucial for the sale of the plant," he said.
Jindal sources said they had given up hopes of their bid going through by end of March 2003.
Market estimates put the Jindal bid at around Rs 600 crore, which was below the plant's book value of Rs 800 crore (Rs 8 billion).
Under the offer terms, Salem would be transferred to a joint venture company where Jindal Strips would hold 74 per cent and SAIL, the balance, for a year. After a year, Jindals would be given the option of buying out SAIL.
The divestment was crucial for SAIL as it would prop up the PSU's bottomline significantly. As SAIL was endeavouring to register net profit next year, the sale was of special significance.
However, Salem was not the only divestment being pursued by SAIL. As part of its restructuring plan, it had decided to exit several non-core activities.
The process of sale of other non-core assets included Bhilai Oxygen, Visveswarya Iron and Steel plant and its Rourkela fertiliser plant.
The company had also launched a scheme for leasing of houses to employees and ex-employees. Over 9,000 employees opted for the scheme. SAIL was able collect about Rs 200 crore (Rs 2 billion) as premium from leased dwelling units at the end of 2001-02.
One of SAIL's most successful divestments was the sale of its captive power plants. The company divested its captive power plants at Bokaro to the joint venture company, Bokaro Power Supply Company and roped in Damodar Valley Corporation as a strategic alliance partner.
Through this divestment a capital gain of Rs 391 crore (Rs 3.91 billion) was achieved.
The divestment of captive power plant II at Bhilai was also successfully completed with NTPC as a strategic alliance partner in the joint venture company, Bhilai Electric Supply Company. This resulted in a capital gain of Rs 99 crore (Rs 990 million).
