Disinvestment in SCI more likely this year

The process is ongoing in the Ministry of Corporate Affairs. EoIs (expressions of interest) are already there. Due diligence is on. Only financial bids are to be called after the demerger, said Tuhin Kumar Pandey, Secretary, Dipam

New Delhi: Government-owned Shipping Corporation of India (SCI) is expected to be privatized in this calendar year, with the demerger process and due diligence by the bidders running parallel.

SCI demerger is continuing, Department of Investment and Public Asset Management (Dipam) Secretary Tuhin Kumar Pandey told Bizz Buzz. The issue was taken up in the SCI board meeting and decisions were taken on May 6.

SCI said in a BSE filing that its "Board has approved certain modifications in the scheme of arrangement for demerger of non-core assets of Shipping Corporation of India Ltd into Shipping Corporation of India Land and Assets Ltd."

The said modification is subject to approval of the Ministry of Ports, Shipping and Waterways (MoPSW) and Dipam, the filing said "changes will not impact the share entitlement ratio and other major terms and conditions of the scheme of arrangement for the shareholders."

In August 2021, the SCI board had cleared the demerger scheme to hive off the non-core assets. Shipping Corporation of India Land and Assets Ltd (SCILAL), incorporated in November 2021 under the MoPSW, would own the hived off assets.

"The process is ongoing in the Ministry of Corporate Affairs. EoIs (expressions of interest) are already there. Due diligence is on. Only financial bids are to be called," Pandey said, adding that these will be called after the demerger.

The government had received several EoIs for buying SCI in March last year. In December 2020, Dipam had invited bids for the sale of the government's total SCI equity of 63.75 per cent.

It may be recalled that the Atal Bihari Vajpayee government had tried to privatize the shipping major in the early 2000s, but the attempt came a cropper. A number of petitions were filed challenging the strategic sale of SCI, HPCL, and public sector undertakings.

In October 2003, an exasperated Arun Shourie, the then disinvestment minister, had lamented that the halt "reinforce the impression of uncertainty about investments in India."

At that time, the government was forced to defer indefinitely the financial bids for Shipping Corporation of India and Hindustan Copper.

This time, however, the officials are confident of completing the SCI transaction. It may be recalled that for the current fiscal the government has set a disinvestment target of Rs 65,000 crore.