Financial Daily from THE HINDU group of publications
Wednesday, Jan 07, 2004
Financial Daily from THE HINDU group of publications Wednesday, Jan 07, 2004 |
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Shipping Industry & Economy - Disinvestment Divestment panel wants Ennore Port privatisation put on hold — Moots IPO for Electronics Corporation Our Bureau
New Delhi , Jan. 6 THE Disinvestment Commission has said that the time was not ripe for privatisation of Ennore Port Ltd (EPL), the first corporate major port in the country, and asked the Government to wait for at least three years till the port attained a "critical size" in operations before thinking in this direction. In its 23rd report submitted to the Government, the Commission has recommended initial public offering (IPO) of Government equity in Electronics Corporation of India Ltd (ECIL). The Commission said that though it was against immediate privatisation of Ennore Port, disinvestment of Government's holding in the company could be considered after a period of three years. It noted that Ennore Port incorporated in 1999 was yet to achieve critical size with only 2 of its planned 22 berths being currently operational. "In view of this, it is felt that EPL should continue as a Government company for a period of three years, by which time the operations are expected to attain critical size," it said. The Government currently holds 67 per cent stake in EPL with Chennai Port Trust holding the balance stake. It was developed as an alternative to Chennai port to handle dirty cargo (coal) due to environmental reasons. In case of delay in developing the Port to its full potential, disinvestment may be considered after an appropriate regulatory framework is installed. In such an event, the Commission said 51 per cent of the equity should be disinvested in favour of a strategic partner through the competitive bidding route while the balance shares may be disinvested five years thereafter. In the case of Electronics Corporation (ECIL), a fully-owned government entity under the Department of Atomic Energy, the Commission suggested that it should be allowed to run as a Government company for some time. However, the Government could immediately disinvest a portion of its equity by way of initial public offering (IPO) to ensure greater external scrutiny.
More Stories on : Shipping | Disinvestment | IPOs | Electronics
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