The finalisation of a Rs 800-crore bid placed by four government-owned major port trusts, led by Visakhapatnam Port Trust, to buy the Centre’s 73.44 per cent stake in Dredging Corporation of India (DCI) has been delayed, because the market regulator SEBI is yet to clear a request to exempt the deal from the mandatory open offer obligations under the takeover code.

The financial bid submitted by Visakhapatnam Port Trust, Paradip Port Trust, Jawaharlal Nehru Port Trust and Deendayal Port Trust was opened on February 4, but the Department of Investment and Public Asset Management (DIPAM) has not declared the price, and the transaction is yet to be approved by the Alternate Mechanism set up by the Cabinet to clear PSU divestments ahead of a share purchase agreement to be signed by the two parties, at least two people familiar with the matter said.

The four major port trusts have sought an exemption from open offer provisions, citing the deal between two Central Government-owned entities would not result in a change in management control – DCI would remain with the government. This would be the second such instance in recent times when public shareholders would be given the go-by during disinvestment of a government firm.

State-owned oil explorer ONGC Ltd was exempted from making the mandatory open offer when it bought state-run oil refiner HPCL in 2018.

Besides, an open offer would reduce the public shareholding in DCI to below 25 per cent from the current 26.53 per cent, thereby violating a SEBI rule for listed firms, including PSUs, to have a minimum 25 per cent public float to ensure wider public participation.

The four major port trusts have signed a memorandum of understanding (MoU) amongst themselves, that sets out the share each port trust would hold in DCI -- Vizag will hold 19.44 per cent, with the other three taking an 18 per cent stake each.

Accordingly, each port trust has contributed some Rs 200 crore towards the financial bid, a Shipping Ministry official, one of the two people mentioned earlier, said.

SBI Caps was hired by the port trusts to prepare the bid.

The Dredging Corporation deal is critical for the government’s plan to raise as much as Rs 80,000 crore through stake sale in public sector undertakings in the current fiscal.