The government today received over Rs 600 crore in special dividend and taxes from Engineers India Ltd (EIL) as a prelude to its divestment of 10 per cent equity in the engineering consultancy firm.
In perhaps the first by a PSU, EIL paid a 1,000 per cent (Rs 100 per share) special dividend totalling Rs 561.65 crore. Of this, the government, which holds 90.4 per cent equity, got Rs 507.65 crore plus a dividend tax of over Rs 96 crore, EIL Chairman and Managing Director A K Purwaha said.
Purwaha handed over the special dividend cheque to Oil Minister Murli Deora here today.
He said the company will now issue two bonus shares for every one held and subsequently split the Rs 10 share into two of Rs 5 each.
"We have called an extraordinary general meeting (of the company's shareholders) on April 22 for the purpose," he said, adding that the process would be completed by May-end.
Thereafter the company will finalise audited accounts for 2009-10 fiscal before filing draft red herring prospectus for the follow-on public offering, where the government is proposing to sell its 10 per cent stake.
"The public offering looks more realistic in the July- September quarter," he said.
At the current market price, the government is expected to raise about Rs 1,000 crore through sale of its 10 per cent stake in EIL, which provides engineering consultancy services mostly to oil and gas firms.
EIL, which had a cash reserve of Rs 1,320 crore as on March 31, 2009, has till date given Rs 600 crore in dividends to the government on a Rs 25 lakh share capital that formed the company in 1965.
The special dividend and the proposed divestment would give the government about Rs 1,600 crore.
EIL had reported a 67 per cent jump in net profit to Rs 310.65 crore in April-December period of the 2009-10 fiscal. Turnover had risen 20 per cent to Rs 1,353.46 crore.
