Date:29/05/2005 URL: http://www.thehindubusinessline.com/2005/05/29/stories/2005052900940200.htm

Back Ruia Group gets nod to buy back residual stake of BBUNL in Jessop — Centre to appoint valuer to determine price

Pratim Ranjan Bose

Kolkata. May 28

, THE Union Law Ministry has cleared the proposal from Ruia Group to buy back the residual stake of Bharat Bhari Udyog Nigam Ltd (BBUNL) in Jessop. This makes the complete divestment of the Government interest in Jessop.

Talking to Business Line, the Ruia Group Chairman, Mr Pawan Ruia, said that earlier this week the Union Law Ministry had cleared the proposal forwarded by the Finance Minister on handing over the residual stake. With Law Ministry's approval, the Union Finance Ministry will now appoint a valuer to determine the price for the 27 per cent stake.

It is learnt that the Centre has already shortlisted four firms — PricewaterhouseCoopers, Ernst & Young, KPMG Peat Marwick and Delloite Haskins and Sells, for the purpose. "We expect the valuer to be appointed this week and the whole process of acquiring the 27 per cent stake to be over in two to three months."

Ruia Group had acquired a 72 per cent stake in Jessop at a price close to Rs 2.50 per share. The total value of the acquisition was Rs 18.18 crore.

Mr Ruia said the price per share could be higher this time. "In any case, we have to accept the price they fix," he added.

To capitalise on the rising demand for coaches in India and in the neighbouring developing countries, Jessop has adopted a capacity expansion drive at its existing facility in Kolkata. The programme will increase the coach manufacturing capacity by 50 per cent from the existing 216 numbers. The expanded capacity will be commissioned in next eight months.