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SAIL appoints bankers for FPO; in talks over timing

SAIL appoints bankers for FPO; in talks over timing
PTI
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First Published: Mon, Oct 18 2010. 02 22 PM IST
Updated: Mon, Oct 18 2010. 02 22 PM IST
New Delhi: State-owned SAIL on Monday said it has appointed 6 merchant bankers for managing the company’s follow-on public offer (FPO) and is in discussion with them to finalise the timeline of the share sale programme, which is expected to raise Rs8,000 crore in the first phase.
“We have made offers to 6 merchant bankers to manage the first phase of SAIL FPO. Now, they have accepted it. We are in discussion with them on the timeline (of the FPO) and over the draft red herring prospectus,” SAIL chairman C.S. Verma told reporters on the sidelines of felicitation ceremony of the Commonwealth Games medalists.
Sail had offered the bankers-- JP Morgan, Deutsche Bank, SBI Capital, Enam Securities, Kotak Mahindra Capital and HSBC, to manage its FPO.
“The first phase of the FPO can be launched in mid- December and if we miss that deadline, it can happen in January-February next year,” Verma added.
Speaking on the occasion, steel minister Virbhadra Singh said that the government is looking at “opportune time” to launch the share sale program of companies like SAIL and Manganese Ore India Ltd.
The banks will manage the first phase of its 20% share sale programme, under which the government plans to divest 5% of its stake in the company, while the steel giant will issue additional shares equivalent to a 5% stake.
Another 10% stake will be sold under the second phase of the FPO, the timing of which will be decided later. The two-phase FPO may help raise a total of Rs16,000 crore.
At present, the government holds a stake of a little over 85% in SAIL, and post-FPO its equity in the company is expected to go down to about 69%.
SAIL wants to part-fund its Rs70,000 crore expansion programme with the proceeds from the share sale, while for the government, the stake dilution will help attain its disinvestment target of Rs40,000 crore for this fiscal.
Shares of SAIL were trading at Rs216.80 a share on the Bombay Stock Exchange in the afternoon session, down 1.63% over the previous close.
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First Published: Mon, Oct 18 2010. 02 22 PM IST
More Topics: SAIL | FPO | Bankers | Public offer | IPO |