New Delhi, February 5
The Tatas turned into a telecom behemoth today after the Government announced the sale of its 25 per cent stake along with management control in the Videsh Sanchar Nigam Ltd (VSNL) to Panatone, a Tata group company, at a price of Rs 1,439 crore.
In another big ticket disinvestment, the Cabinet Committee on Disinvestment accepted public sector refining giant Indian Oil Corporation’s bid, over that of Royal Dutch Shell, to acquire retailing major IBP for Rs 1,153.68 crore.
The acquisition of the VSNL gives Tata a foothold in every sector of the telecom industry ranging from telecom equipment manufacturing, Internet, basic services, cellular services and international gateway.
For the IOC, its bid of Rs 1,153.68 crore was far ahead of the runners-up offer of Rs 595 crore and the CCD promptly approved it, Disinvestment Minister Arun Shourie told newspersons here.
For the IOC, which is preparing for open competition after the government abolishes administered price mechanism APM for petroleum products by March-end this year, the acquisition of the IBP would give it a large foothold in North India where the retailing company has a majority of its 1500 outlets.
Mr Shourie admitted that the acquisition of the IBP by another PSU could raise eyebrows and it was for this reason that the government had now decided that when the disinvestment of Hindustan Petroleum and Bharat
Petroleum companies was taken up after the dismantling of APM, the IOC would not be allowed to bid for it. This would ensure genuine privatisation, he said.
In the case of the VSNL, Reliance was the other company in the race which offered Rs 1346.625 crore.
The government had fixed a reserve price of Rs 1218.375 crore for the VSNL and Rs 337 crore for the IBP, Mr Shourie said, adding that the IOC had bid Rs 1551 per share of the petro PSU while the Tatas had bid Rs 202 per share of the telecom giant.
The two successful bidders, who would sign transaction documents with the government in the next two days, would have to make an open offer for 20 per cent of floating shares of each corporation they acquired.
While the telecom and petroleum companies got a good response, the hotels under the disposal of the government had few takers. Of the 12 India Tourism Development Corporation and the Hotel Corporation of India properties, it could finalise the sale of only four properties, that too for a price of Rs 202 crore.
The minister said the Centaur Airport hotel in Mumbai would be sold to A.L. Batra of Radisson (Delhi) for Rs 83 crore against the reserve price of Rs 78 crore.
Singapore-based Silverlink Holdings successfully bid for Lodhi Hotel, New Delhi, at a price of Rs 76.22 crore against a reserve price of Rs 40.36 crore.
Sushil Gupta and Associates of Hyatt got Qutub hotel of the ITDC for Rs 35.67 crore against a reserve price of Rs 31 crore while Laxmi Vilas Palace Hotel, Udaipur, went to Bharat Hotels for Rs 7.52 crore against a reserve price of Rs 6.12 crore.
