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Friday, Jun 07, 2002

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RCF wants to bid for HOCL stake

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IN what could pose an additional complication for the Ministry of Disinvestment, Rashtriya Chemicals and Fertilisers (RCF) has sought permission to acquire a 32.61 per cent stake in Hindustan Organic Chemicals Ltd (HOCL), yet another PSU under the administrative control of the Ministry of Chemicals and Fertilisers.

What makes the proposed acquisition unique is that the Centre has identified both these companies for disinvestment. While HOCL figures among the 25 PSUs which have already been privatised or cleared for strategic sale by the Cabinet Committee on Disinvestment (CCD), RCF's case is currently under consideration by the Core Group of Secretaries on disinvestment.

In a notice to the various stock exchanges on Thursday, RCF stated that it had given an expression of interest for acquiring 32.61 per cent stake in HOCL. The company has approached the Department of Fertilisers for permission in this regard.

The Centre currently has a 92.5 per cent stake in RCF, while its holding in HOCL stands at 58.6 per cent. In fact, the Centre had way back in April 1992 shed 20 per cent share in HOCL in favour of mutual funds, financial institutions and banks. The Centre's stake fell further to 58.6 per cent following a public issue in November 1994.

If RCF's proposed bid for HOCL were accepted, it would represent a case of an likely-to-be-privatised PSU seeking to acquire controlling stake in another about-to-be-privatised PSU. The reactions of the Ministries concerned - more particularly the Ministry of Disinvestment - are yet to be known.

RCF, which is a leading fertiliser manufacturer with plants at Thal and Trombay, recorded a profit after tax (PAT) of Rs 52.61 crore on net sales of Rs 2054.20 crore during the year ended March 31, 2002.

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