The merchant banking arm of State Bank of India - SBI Capital Markets - has bagged the consultant's mandate for the corporatisation of Haldia Dock and the merchant banker's mandate for the equity syndication of Petronet LNG.
The two mandates were bagged by SBI Caps in the last fortnight, merchant banking sources said.
"The mandate for the corporatisation of Haldia Dock was bagged in the face of stiff competition. The others in the race included PriceWaterhouse Coopers, KPMG and Infrastructure Leasing & Financial Services," sources said.
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SBI Caps will have to draw up a roadmap for corporatisation and possible privatisation and submit it within four months to the Calcutta Port Trust. It will have to suggest financial structuring of the company to be incorporated, determine the fair value of the company's shares, revenue stream of the company for 20 years, the terms under which Kolkata would provide common facility to the company, the ownership of land and the terms of lease of land. Haldia Dock is the profit making arm of the Calcutta Port Trust.
Earlier, the Calcutta Port Trust had opposed the move by the Union shipping ministry to privatise Haldia Dock through a joint venture. Even if Haldia as to be corporatised as a wholly owned subsidiary of the Calcutta Port Trust, it would have led to problems.
This concept could have resulted in a conflict of interest. As the owner of all the shares of the corporatised Haldia, Kolkata would like to see Haldia doing better and better so as to maximise its net worth. On the other hand, as a rival port, Kolkata may also like to see some cargo coming to its port. This may lead to a conflict of interest. SBI Caps' mandate is to suggest a model that could resolve such ticklish issues.
In the case of Petronet LNG, SBI Caps' mandate is to syndicate about 30 per cent equity. At present IOC, BPCL, GAIL and ONGC hold 12.5 per cent stake each in Petronet LNG. Ras Laffan and Gaz de France have entered into agreements for picking up 10 per cent each. Earlier, SBI Caps had raised about Rs 1,400 crore as debt for Petronet LNG which is planning to set up a 5 million tonne gas terminal at Dahej in Gujarat in two stages. The company also plans to set up a terminal at Kochi in Kerala at a later stage.