NEW DELHI : Privatization of Shipping Corp. of India (SCI) is making slow progress as the company has not yet transferred its non-core assets to a spin-off company, a government official said. The government will only issue financial tenders once the split process is complete.
The company’s headquarters in South Mumbai, Shipping House, a training institute in Powai and a few other properties will not be sold but transferred to the demerged Shipping Corp. of India Land and Assets Ltd.
“The split company will be a mirror company of SCI, with the same shareholding scheme as SCI and will house all non-core assets. Shipping House will be transferred to this company and will not be sold. These assets will be dealt with later after the divestiture maritime activity,” the official said, asking not to be named as the process was still ongoing.
The official added that the dividend issued by the company and some cash will also have to be transferred to the split entity to meet regulatory requirements. The spin-off of the non-core assets is in the process of being approved by the board of directors of the central public sector enterprise, and the transfer of the assets will take approximately three to four months.
“Once this process is complete, the financial offers will be called. Bidders have already expressed interest; so, we will move forward,” the official added.
As part of its strategic divestment strategy, the State will transfer its entire 63.75% stake in the SCI as well as management control to a private entity. The remaining capital of the BSE-listed entity is held by the public.
With 59 vessels and 3,281 employees, SCI is India’s largest shipping company by capacity and also manages a large number of vessels on behalf of various government departments and agencies.
The government had published the preliminary information memorandum for the sale of SCI in November 2020 and launched a call for expressions of interest, which stipulated that non-core assets that will not be part of the transaction will be revealed at the time of the sale. publication of the request for proposals. According to reports, several companies, including US-based Safesea Group, a consortium led by NRI businessman Ravi Mehrotra’s Foresight Group and Hyderabad-based Megha Engineering, were among the bidders that had expressed interest. However, the covid-19 pandemic has slowed down most divestments undertaken by the government in 2020 and 2021.
Inquiries to the Ministry of Finance sent on Saturday went unanswered until press time.
The spin-off of non-core assets also delayed strategic divestments from BEML Ltd and NMDC Ltd.
In October 2020, the Center had approved the spin-off of NMDC’s Nagarnar steel plant in Chhattisgarh and the strategic divestiture of the split entity – NMDC Steel – by selling its entire stake to a strategic player. NMDC is likely to complete the split process from August to September, coinciding with the commissioning of the unit.
Expressions of interest will be called by the Department of Investment and Public Property Management (DIPAM) once this process is complete, the previously quoted official said.
In the case of BEML, around 140 acres of land in Bengaluru and Mysore will be spun off into a separate entity called BEML Land Assets Ltd, which was approved by the Defense PSU board last year.