Four Major Ports All Set to Inkdeals For DCIL Share Purchase

Visakhapatnam Port Trust will have a majority stake of 19.47% of the PSU, say sources

Having completed all formalities, four major ports including Visakhapatnam Port Trust (VPT) are all set to the sign share purchase agreements for 73.47% of government equity in the Dredging Corporation of India Limited (DCIL) in the next few days.

Market regulator Securities and Exchange Board of India (SEBI) has already waived off the mandatory open offer route under the ‘Takeover Code’. The DCIL shares listed on the BSE and the NSE are hovering between ?350 and ?400.

Highly placed sources told The Hindu that VPT will have majority stake of 19.47% of the DCIL, leaving 18% each to the Jawaharlal Nehru Port Trust, the Paradip Port Trust and the Deenaayal Port Trust.

Sources also revealed that the four cash-surplus ports would buy the government equity for a little over ?1,000 crore. Asset valuer Protocol Insurance & Loss Assessees Private Limited had earlier put the expected realisation from stake sale at ?1,500 crore. Buckling under pressure from the employees, Opposition parties and others, the government last year announced shelving of strategic sale of the Visakhapatnam-headquartered public sector unit

The company has been earning profits since its inception in 1976. However, on the recommendation of the Department of Investment and Public Asset Management (DIPAM) and with a clearance from the NITI Aayog, the Cabinet Committee on Economic Affairs (CCEA) had approved the purchase of government shares by the four ports in November last year, stating that it would facilitate the linkage of dredging activities with the ports.

This follows the controversial decision for strategic sale of the DCIL in 2017 leading to public outcry over the privatisation of the company. The decision also drove one of the employees to jumping before a train and the death forced the employees to hit the streets in protest against the strategic sale.

Strategic sale

The government’s contention at the time of deciding strategic sale of DCIL was that its profit margin was shrinking and it was not able to face competitions from private players. However, the employees and unions had argued that the withdrawal of preferential treatment to the DCIL in allotting dredging orders by major ports, failure to release of ?302 crore by the government towards investment made in the Sethusamudram Corporation and denial of permission to undertake dredging, reclamation and consultancy works in Middle East and other regions had led the company to this pass.

“After the takeover of government share, the four ports will constitute a board by appointing directors and managing director,” a senior official said.

_{Source: thehindu.com}