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DoD eases divestment norms for Hind Copper
March 26, 2003 17:19 IST
In a move to attract bidders for loss making Hindustan Copper Ltd, the divestment ministry has decided to ease norms for group transfer of equity stake in the divested company allowing strategic partners a greater say in the matter.
A decision to this effect has been taken in the case of HCL where the government is divesting all its equity by incorporating the new provisions in the transaction documents, official sources said.
The ministry would facilitate a more flexible approach towards intra group transfers of PSU stake. It would also make restructuring hassle free.
Under the current dispensation government permission is needed to effect any transfer of stake by a strategic partner in a divested company.
With the new norms, government approval will not be required in case equity in the PSU is transferred from company A to company B provided that strategic partner remains in control.
The government currently holds 98 per cent stake in the copper major, which would be divested to a partner along with management control.
Sterlite Industries and Birla Copper are reported to be in the fray for the stake. A F Ferguson have been mandated as global advisors.
Last month the core group of secretaries on divestment had cleared the transactions documents for sale of equity.
The group had while approving the documents rejected a demand by bidders seeking a further round of restructuring.
Last year the Cabinet had approved a restructuring package for the company to the tune of Rs 440 crore (Rs 4.4 billion) including an element of cash infusion support for separation package and extension of guarantees towards a loan.
The copper major has a workforce of around 6,500 and has been incurring losses for past several years.
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