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Rediff.com  » Business » Bids for MECL stake sale on Tuesday

Bids for MECL stake sale on Tuesday

January 05, 2004 13:13 IST

The government is expected to invite initial bids for privatisation of Mineral Exploration Corporation (MECL) on Tuesday, placing advertisements in specialised technical publications in a change of strategy.

Prospective bidders would be required to submit expressions of interest for acquiring the government's entire equity within four to six weeks, sources associated with the deal said in New Delhi.

In a change of strategy, the government has opted to advertise in specialised technical journals and websites seeking bidders for the company.

Notice inviting EOIs would be placed in international journals and websites. The move to advertise in niche publications was necessitated by the fact that the government felt prospective investors were unlikely to subscribe to financial dailies.

A net worth criteria of around Rs 40 crore (Rs 400 million) is likely to be specified for the bidders.

The government proposes to offload its entire equity amounting to 100 per cent to a strategic partner along with management control. Development finance institution IFCI has been mandated to act as global advisor for the deal.

The Cabinet committee had decided to approve sale of entire equity overruling a proposal by divestment ministry to sell 51 per cent.

Incorporated in 1972, MECL, headquartered in Nagpur, has a paid up capital of Rs 70 crore (Rs 700 million).

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