Cabinet approves sale of five state-run companies

Wednesday 27th November 2019 05:09 EST

The Union cabinet approved strategic stake sale in five state-run companies, including fuel retailer BPCL, Shipping Corporation of India, power companies THDCIL and NEEPCO and logistics firm Concor, a move which will help the government raise up to £8.5 billion of much needed revenues from just the sale in the three listed entities. This is the boldest privatisation move by the Modi government and officials have said the government could also look at foreign companies to buy stakes in these companies.

The cabinet approved the strategic disinvestment of the government’s shareholding of 53.29% in Bharat Petroleum Corporation Ltd (except its equity shareholding of 61.65% in Numaligarh Refinery Limited (NRL) and management control) along with transfer of management control to a strategic buyer. Finance minister Nirmala Sitharaman said Numaligarh refinery will remain a PSU. The cabinet also approved strategic disinvestment of BPCL's shareholding of 61.65% in NRL along with transfer of management control to a staterun operating in the oil and gas sector. The Centre will also sell its 63.75% holding in Shipping Corporation of India Ltd along with transfer of management control to a strategic buyer.

In Container Corporation of India Ltd, the government will sell 30.8% (out of 54.8% equity presently held by the Centre) along with transfer of management control to a strategic buyer. The Centre will sell its 74.23% holding in THDCIL along with transfer of management control to NTPC and also offload its 100% stake in North Eastern Electric Power Corporation Limited (NEEPCO) to NTPC.

The cabinet committee on economic affairs, chaired by Prime Minister Narendra Modi also accorded 'in-principle' approval for enabling reduction of the government’s paid-up share capital below 51% in select state-run firms while retaining management control on case to case basis, taking into account the government shareholding, and the shareholding of government-controlled institution. The Centre had announced its intention to go below 51% in state-run companies in the 2019-20 budget.

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