MMTC has been looking for investors to sell its 26% stake in ICEX, which wound up its operations towards the end of 2013
New Delhi: State-owned MMTC Ltd on Monday said the company will sell its 10% stake in the commodity bourse Indian Commodity Exchange (ICEX) equally among two bidders, who participated in the global tender. MMTC has been looking for investors to sell its 26% stake in ICEX, which wound up its operations towards the end of 2013. According to people familiar with the matter, MMTC had invited bids for purchase of a minimum 20 lakh shares (equivalent to 1% shareholding in the bourse) at a minimum reserve price of ₹ 10 a piece. Currently, MMTC holds 5.20 crore equity shares in ICEX at a face value of ₹ 5 each.
“...the board of directors of the company in its meeting held on 11 September 2015 has approved the proposal for sale of 10% of ICEX equity i.e. 5% each, to the two bidders who participated in the global tender against the present holding of 26% in ICEX by MMTC @ ₹ 10/- per share..." the company said in a regulatory filing. However, the sale is subject to the approval by the government and the Forward Markets Commission (FMC), it added.
FMC had also issued a show-cause notice to ICEX to scrap its registration because no business has been generated on the exchange since December 2013. MMTC is planning to divest stake in ICEX as it is not interested to infuse more funds to increase the net worth of exchange to meet the regulatory norms. ICEX does not have sufficient net worth and requires infusion of funds from existing shareholders as well as investment from fresh shareholders.
During the end of 2013, the ICEX had decided to wind up operations and trading was accordingly suspended on 24 December 2013 after the business volumes got affected due to several factors including imposition of commodity transaction tax and the ₹ 5,500 crore payment scam at NSEL. Other stakeholders in ICEX include Reliance Exchange Next with 26%, IBFSL and Abhinay Trading Corporation’s 14% each, Indian Potash Ltd with 10%, while KRIBHCO and IDFC hold five per cent each in the exchange.
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