Govt yet to decide on Shipping Corp stake sale

Govt yet to decide on Shipping Corp stake sale
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First Published: Wed, Jul 28 2010. 03 53 PM IST
Updated: Wed, Jul 28 2010. 03 53 PM IST
New Delhi: The government is yet to take a decision on a stake sale in Shipping Corp of India, while share sales in Dredging Corp of India and Cochin Shipyard are also yet to be decided, a top government official said late on Tuesday.
Another government official had told Reuters in May that a share sale in Shipping Corp would take place in 2010, while newspapers have been reporting on likely sales in Dredging Corp and Cochin Shipyard.
“There is a proposal (for Shipping Corp). But it has not moved beyond the stage of a proposal. It has to be examined by this ministry and then taken to the Cabinet,” K Mohandas, secretary at the shipping ministry, told Reuters in an interview.
The share sale proposal includes selling a 10% government stake in the shipping firm and issuing new shares, worth 10% of the firm’s equity capital, he said.
Shipping Corp has a market value of $1.4 billion.
Mohandas added that the government has no immediate plans to sell stake in the dredging firm and the initial public offer of the shipbuilding firm is also unlikely in the current fiscal year, which ends in March 2011.
“We have been looking at that. We are going slightly slow on that (Cochin Shipyard’s stake sale) because the world over, there is a lull in shipbuilding activity,” he said.
“Of course, there is one view that this is the time to invest in infrastructure and expand. But then you will have to take a view considering the general market conditions,” he said.
India aims to sell shares of about 60 state-run firms in the coming years as it looks to boost spending on social welfare schemes without widening its fiscal deficit.
In November 2009, the federal government approved a long-pending divestment policy that mandates at least 10% public holding in state-run firms.
The government has pencilled in proceeds of roughly Rs40,000 crore from sales in government companies in the current fiscal year to end-March 2011.
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First Published: Wed, Jul 28 2010. 03 53 PM IST