10 January 2001

Government likely to offload PSU stake to FIs
New Delhi: The Department of disinvestment is reported to be working on a new to allow offloading of government stake in blue chip public sector units to financial institutions (FIs). The proposed scheme would be a slightly revised version of the original plan earlier mooted by former finance secretary Mr. Vijay Kelkar.

Under the proposed plan, the FIs can take a decision on whether to buy government stake or not on a case-to-case basis. Some of the FIs, which are expected to acquire government stake, include Unit Trust of India, State Bank of India, Industrial Development Bank of India and Infrastructure Development Finance Corporation.

FIs had prepared a report, in which they had identified more than half a dozen blue chip companies in which they were interested in picking up stake.

Once the modalities are finalised, the DoD is expected to approach the cabinet committee on disinvestment with firm proposals on about half a dozen PSUs, including Videsh Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd. The government would however, in most cases retain the 26 per cent stake required to maintain the management control. Presently, disinvestment by the usual route of bidding takes a minimum of 12 to 18 months, making it difficult to meet the target of Rs 10,000 crore this fiscal. Of the 33 companies on which the DoD has started working, no company has yet been sold.

9 January 2001

CMIE pegs GDP growth estimate at 5.8%
Mumbai: Centre for Monitoring Indian Economy (CMIE) has said that the Indian economy is estimated to grow by 5.8 per cent during 2000-01. Growth rate has already started decelerating during the first half of the year, to 5.9 per cent from 6.3 per cent, in the first-half of the previous year, while the remaining two quarters do not hold any promise of accelerating this growth rate..

The premier economic monitoring agency said that industrial output is projected to grow by 5.5 per cent, a sharp deceleration from 8.1 per cent growth recorded in 1999-00. During April-October, the IIP growth had already slowed down to 5.8 per cent compared to 6.6 per cent in the corresponding period of 1999. The rise in interest rates in July and the hike in prices of petroleum products has added to the process of the slowdown, it said.

8 January 2001

Reliance completes $150 m loan refinance
New Delhi: Reliance Industries Limited (RIL), one of India's largest private sector companies, has successfully completed refinance of its $150 million euromarket syndicated loan.

According to a Bank of America statement the loan, with a residual maturity of 1.75 years and a margin of 45 basis points over dollar on six-month libor, will save 30 basis points per annum over the previous loan. The Bank of America along with the ABN Amro Bank and Citi Bank are the three mandated arrangers to the transaction.

The transaction was well received by the market with 15 banks from nine different countries inking the deal on January 5, the bank statement said. Among other banks, which signed the pact to become the final arrangers included Bank of Baroda, Mizuho Financial Group (FIJI Bank), Standard Chartered Bank, State Bank of India (SBI) and Tokyo-Mitusbishi International.

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