VSNL to divest 15 p.c. equity to strategic partner

NEW DELHI, DEC. 8. The Government plans to offload 15 per cent of Videsh Sanchar Nigam Ltd.'s (VSNL) equity to a strategic partner along with the transfer of management.

The issue will be taken up at the Cabinet Committee on Disinvestment after the Parliament session.

As per the latest scheme devised by the Department of Disinvestment (DoD), the Government will first disinvest 15 per cent of the paid-up equity to a private company through strategic sale along with transfer of management.

After the strategic sale, the Government would disinvest a minimum of 5 per cent of the company's equity through a fixed public offering in the domestic market for small investors and will be priced at a discount to the prevailing market price of the VSNL stock. The new scheme will replace a previous one that entailed that the Government will first bring down its holding to below 50 per cent through a public offering and then effect a strategic sale.

The options for disinvestment including employee stock option will be examined particularly with reference to the pricing of shares for making shares available to the employees. Sources say that the Government feels that by carrying out VSNL's disinvestment in two phases, the returns will be higher.

After the strategic sale, the Government can keep the flexibility to change the size of the public offering in accordance with market conditions, the sources added.

- UNI

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Section  : Business
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