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SCI: Essar, 2 others sign confidentiality pact

July 09, 2003 14:38 IST

Three bidders, including the Essar group, vying for the government stake in the Shipping Corporation of India have inked the confidential information memorandum, even as uncertainty remained over the fate of Japan's K-line the sole international bidder.

Sterlite Industries and the Videocon group have also signed the memorandum, sources associated with the divestment process said in New Delhi on Wednesday.

With the signing of the confidentiality agreement, prospective bidders would be entitled to proceed with data room visits and on-site due diligence exercise.

Uncertainty over the fate of the international bidder comes as a setback for the process as the government was forced to invite fresh bids last year hoping to attract more foreign players into the fold.

In the previous round of bidding, the government had put on the block a majority stake in the company with a cap of 25 per cent on the foreign partner.

Following a poor response, the government decided to lift the cap paving the way for fresh bids.

The government proposes to sell a majority 51 per cent equity stake in Shipping Corporation along with management control to a strategic partner.

Following the privatisation, government would be left with close to 26 per cent stake after reserving a small percentage for the employees.

It currently holds close to 80 per cent equity in the shipping major.

An earlier attempt for privatisation had also attracted a similar group of bidders.

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