Posted January 1, 2019
Four major port trusts have signed an MoU among themselves to acquire the government’s 73.44 per cent stake in Dredging Corporation of India (DCI).
Under the MoU, Visakhapatnam Port Trust will buy a 19.44 per cent stake from the government while Jawaharlal Nehru Port Trust, Deendayal Port Trust and Paradip Port Trust will take an 18 per cent stake each.
SBI Caps has been mandated to undertake due diligence of DCI, at least two people briefed on the development said.
Apart from assisting the four port trusts in arriving at a valuation for the stake, SBI Caps will also liaise with SEBI to get the buyers an exemption from a mandatory open offer to retail public investors.
The is because the deal between the Central government-owned entities will not result in a change in control — DCI will remain with the government.
This will be the second instance in recent times where the public shareholders have been given such a go-by during the disinvestment of a government firm. Earlier this year, ONGC was exempted from making the mandatory open offer when it bought HPCL.
Besides, an open offer would have reduced the public shareholding in DCI to below 25 per cent from the current 26.53 per cent, thereby violating a SEBI rule for listed firms including PSUs to have a minimum 25 per cent public float to ensure wider public participation.
The four ports trusts expect to sign the share purchase agreement with the government after January 10, one of the sources said.
At current market price, the deal is expected to fetch the government about ?715 crore. The latest Budget had set a target of ?80,000 crore from stake sales in government companies.