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SBI Caps, IDBI, PwC vie for advisor mandate for CPSEs' equity recast

New Delhi

11-December-2019

The department of disinvestment will appoint general advisors from the shortlisted companies -- SBI Caps, IDBI Cap, AWR Lloyd, PricewaterhouseCoopers and LSI Financial Services -- for making a detailed analysis for restructuring selected central public sector enterprises (CPSEs) in low priority sectors where the government wants to sell its equity with transfer of management control.

According to a notice by the Department of Investment and Public Asset Management (DIPAM), the selected advisor among the shortlisted ones will examine different aspects of certain CPSEs for restructuring and efficient management of government's equities.

The DIPAM had in October invited general advisors to prepare a detailed analysis for restructuring selected central public sector enterprises (CPSEs) in low priority sectors where the government wants to sell its equity with transfer of management control. The advisors would also help certain CPSEs to sell minority stake keeping in mind the current corporate laws, Sebi regulations, sectoral policy, and domestic as well as international market conditions.

Equity restructuring exercise is critical for the government as it has set a disinvestment target of Rs 1.05 lakh crore. During the current financial year so far little over Rs 17,350 crore has been mopped up through disinvestment transactions even as only three-and-a-half months are left to achieve the target.

Privatisation of BPCL and Concor and Shipping Corp are due this fiscal so is Air India. The DIPAM said the government is following a policy of strategic disinvestment with transfer of management control in case of certain selected CPSEs, including subsidiaries, units and joint ventures, which are in "low priority" sectors.

Besides, in certain other CPSEs, the policy of minority stake sale without transfer of management control, through various Sebi-approved methods, are being followed in order to unlock value, promote public ownership and higher degree of accountability, Dipam said.

In order to efficiently manage the government's investments in equity, a detailed analysis for restructuring of selected CPSEs is necessary keeping in view the corporate laws, Sebi regulations, sectoral policy, and international and domestic market conditions.

DIPAM proposes to empanel general advisors for this purpose, it said. The advisors will be required to prepare the "detailed report" on the CPSEs on detailed description of operation, activities, joint venture, subsidiaries, industry analysis, country risk, economic cycle risk, technology risk and regulatory issues.IANS