The Hindu Business Line : Zuari-Chambal bids for Paradeep Phos

Most of the contenders appear to have quit the race for PPL despite an assurance from the Government that it will clean up the balance sheet of the company.

NEW DELHI, Feb. 8

THE K.K. Birla promoted Zuari-Chambal group is understood to have submitted a joint bid for acquiring 74 per cent of the Government's stake in Paradeep Phosphates Ltd (PPL), according to sources.

Four companies had completed their due diligence of the company including Oswal Chemicals and Fertilisers Ltd, Tata Chemicals Ltd, Zuari-Chambal group and the public sector Rashtriya Chemicals and Fertilisers Ltd.

The bid submitted by the Zuari-Chambal group will be evaluated by the evaluation committee and the inter-Ministerial Group set up for overseeing the strategic sale of PPL.

The bid will then be discussed by the Core Group of Secretaries on Disinvestment and referred to the Cabinet Committee on Disinvestment (CCD) for a final view.

"The bid of the Chambal-Zuari group will sail through if it exceeds the reserve price set by the Government, otherwise it will be rejected," Government sources said.

Most of the contenders appeared to have quit the race for acquiring PPL despite a categorical assurance from the Union Government that it would clean up the balance sheet of the ailing company upon successful privatisation, the sources said.

The CCD at its meeting on January 16 had cleared a financial restructuring plan for Paradeep Phosphates involving conversion of outstanding preference share capital of Rs 117.65 crore into equity of PPL.

The CCD had also decided to convert outstanding Government loans worth Rs 85 crore into equity share capital of PPL with effect from March 31, 2001.

Besides, the Union Government had decided to take over a contingent liability of Rs 311.75 crore (principal plus interest and penal interest) arising out of a dispute between PPL and the state-owned MMTC Ltd.

PPL was the first fertiliser PSU to be put on the block for privatisation by the Union Government.

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