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Government to sell off more MTNL, VSNL, ITDC shares

The Union Cabinet today approved the divestment programme for 1999-2000, including proposals relating to Mahanagar Telephone Nigam Limited and the India Tourism Development Corporation.

The Cabinet Committee on Disinvestment, which met in New Delhi today, gave approval for divestment of up to 19 million government-held shares in MTNL through an institutional offering in the GDR [global depository receipts] and domestic market with a common book.

This will reduce the government's share from 56 to 51 per cent, and the expected revenue is in the range of Rs 4000 million.

Briefing reporters, Information and Broadcasting Minister Pramod Mahajan said that in the case of ITDC it was decided that the government equity would be divested up to 74 per cent.

The committee approved divestment of up to 1 million government shares in Videsh Sanchar Nigam Limited as well through a retail offering in the domestic market for the current year.

Another major decision related to divesting 25 per cent of the equity of Hindustan Zinc Limited held by the government in the domestic market. This includes preferential allotment to small investors and employees of the company. Advisers or merchant bankers are to be appointed to carry out the divestment.

The divestment in the case of the Indian Telephone Industries was, however, deferred.

In respect of Central Electronics Limited, the committee decided that if the company's performance does not improve within a year, its research-oriented units will be merged with other government R&D units and the remaining part of the company will be sold off entirely.

It was also decided that 180 million shares held by the government in the Gas Authority of India Limited will be sold in the GDR and domestic markets this year.

The process of offering 5 per cent of the total shares of Indian Oil Corporation will also be completed.

In Hindustan Latex Limited, divestment will be carried out to the tune of 49 per cent of the equity, which will be offered to the public.

It was decided to bring down the government's stake in Madras Fertilisers Limited to 26 per cent from the present 32.74 per cent.

A target of Rs 100 billion has been fixed for mopping up through divestment this year. Last year's target of Rs 50 billion was exceeded and it stood at Rs 61.9 billion, Mahajan said.

Many of these decisions were based on the recommendations made by the Disinvestment Commission, Mahajan said.

UNI

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