Financial Daily from THE HINDU group of publications
Saturday, Jun 21, 2003
Financial Daily from THE HINDU group of publications Saturday, Jun 21, 2003 |
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Industry & Economy
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Disinvestment AP bid to prevent unhealthy competition in GFCL bidding — To take undertaking from bidders Our Bureau
HYDERABAD, June 20 THE Andhra Pradesh Government has decided to take an undertaking from the eight companies, including two foreign companies, that are bidding for the acquisition of the State Government's 25.88 per cent stake in Godavari Fertilizers and Chemicals Ltd (GFCL) that they would not acquire GFCL shares till an agreement between the Government and the successful bidder is concluded. The State Government had also decided to treat the entire bid process as disinvestment as per SEBI regulations. The SEBI authorities endorsed the Government's stand. As per SEBI regulations the preferred bidder would be required to make a mandatory public offer for acquisition of shares in GFCL to the extent of at least 20 per cent. According to the Chairman of the State Government's Implementation Secretariat, Mr Deepak Kumar Panwar, a decision to this effect has been taken to prevent any unhealthy competition in the bidding process and remove the possibility of counter public offer by any unsuccessful bidder. "This provides comfort to the bidders to the extent that they can reasonably assess in firming up the bids without fear of uncertainties after the bid is opened on July 2." Mr Panwar stated that if the bid process was not treated as disinvestment, there would remain an apprehension in the mind of the preferred bidder that the unsuccessful bidder might resort to offering unreasonable counter offers to disrupt the bidding process. Since the process was now treated as disinvestment, the unsuccessful bidders, as per SEBI regulations, were prohibited from offering counter bids after the pronouncement of offer price for the mandatory public offer by the preferred bidder. In a press release, Mr Panwar stated that it was decided to include the escalation clause in the bid form to enable the State Government to maximise the offer price in case the preferred bidder proposed to offer any higher price for the mandatory public offer. This meant that if the preferred bidder offered a higher price to the public, the same price had to be extended to the shares of the State Government. The eight companies that have registered to take part in the bid were Coromandel Fertilisers Ltd, Krishak Bharati Cooperative Ltd, Krebs Biochemicals Ltd, Zuari Industries Ltd, Deepak Fertilisers & Petrochemicals Ltd, South India Corporation (Agencies) Ltd, Fosker Ltd of South Africa and Groupe Chimique Tunisien of Tunisia. The last date for submission of bids is June 21. The commercial, technical and financial part of the bids will be opened on the same day. The price part of bids of the eligible participants will be opened on July 2. The entire transaction is expected to be completed by August.
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