Govt. to reduce share in VSNL, CMC

By Our Special Correspondent

NEW DELHI, FEB. 1. The Cabinet Committee on Disinvestment today decided to reduce the Government's share in Videsh Sanchar Nigam Limited (VSNL) to 26 per cent from the present 52.97 per cent.

The Cabinet panel also decided to reduce the Government equity in Computer Maintenance Corporation (CMC) to 26 per cent from the existing 83 per cent, and cleared the shareholders agreement and share purchase agreement documents for disinvestment from Bharat Aluminium Corporation (BALCO).

Further, it decided that the policy of reservation for purchase by Government from public sector undertakings would continue for the disinvested companies also for two years with a view to ensure they do not face a problem of sudden withdrawal of orders.

Announcing the decisions, Union Minister for Disinvestment, Mr. Arun Shourie, said while disinvesting from VSNL, 25 per cent of the share would be on offer to strategic partners and remaining 1.97 per cent to the employees. At present, while the Government's equity was 52.97 per cent, of the rest 17 per cent was in the market and 30 per cent in ADR.

The VSNL board would also be strengthened and given adequate powers to diversify into newer areas without having to come back to the Government for approvals, with a view to tapping expanding opportunities in the telecom sector. The disinvestment process was expected to be completed in six to eight months.

As regards BALCO, where disinvestment was in the final stages, the documents, which had been cleared today, would be now sent to the Law Ministry was final vetting. In addition, the VSNL board would be strengthened.

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