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3-year lock-in proposed for Nalco partner

NEW DELHI OCT. 15. The Government will propose a three-year lock in period for transfer of shares by the strategic partner subsequent to the privatisation of National Aluminium Company (Nalco).

A provision to this effect will be incorporated in the shareholders agreement proposed to be circulated to prospective bidders vying for Government equity, official sources said.

The lock in period would mean that the strategic partner would not be able to transfer the shares to a third party for the duration of the period specified. Sources added that first draft of transaction documents for Nalco would be circulated to players by this week.

The Government has also despatched all crucial data relating to the company in electronic form via CD-ROM earlier this week thus doing away with the need for a data room.

Sources, however, added that Government would allow the bidders to inspect any documents for physical verification of the same in case it was unclear in electronic form.

The Government proposes to disinvest 60 per cent stake in the aluminium major through a combination of strategic sale, American Depository Receipts (ADR) and domestic offering. As much as 29 per cent stake would be offered to strategic partner along with management control while 20 per cent would be offloaded on American bourses. Another 10 per cent would be offered to retail investors.

Nearly 15 players have been shorlisted for undertaking due diligence slated to kick off by end of the month.

Amongst those shortlisted include domestic majors Sterlite and Hindalco, international giants Glencore, BHP-Billiton, Pechiney and Russian Aluminium. The Government now owns close to 87 per cent stake in the company while the balance is shared by public.

Nalco is currently undertaking a Rs. 4,000 crore massive expansion programme involving doubling of its mining and refining capacities.

PTI

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