The government would lay down a comprehensive policy shortly on the post-APM (administered price mechanism) scenario to get proper valuation for its shareholding in IBP Ltd, which has been put up for sale to a strategic partner which will also gain management control.
Speaking to the media after an interactive session with the Indian Chamber of Commerce, the divestment minister Arun Shourie said a clear policy on the post-APM regime along with an expeditious spinning off Balmer Lawrie from IBP was required to get proper valuation of its stake in the oil distribution company.
He said the ministry of petroleum had prepared a paper on respective roles of the government and the state-owned oil companies in the post-APM era. "The paper is now in circulation among the ministries concerned. A final decision will be taken shortly," he added.
He also said the government would shortly take a final view on whether it would adhere to its earlier stipulation that only companies which had already made Rs 2,000 crore investment in infrastructure of the oil sector, or made a commitment for such investment, would be permitted to bid for IBP. Financial bidding for IBP would not be taken up before these issues were settled.
Shourie said a comprehensive government policy in the oil sector was required to be put in place as the government was determined to withdraw pricing control on petroleum products from April 2002.
Nearly a dozen oil majors have expressed their interest to pick up the government's 33.58 per cent stake in the Rs 8,388 crore IBP. Post-divestment, the government would be holding a strategic 26 per cent in the company.
The minister reaffirmed that the divestment of IBP, along with some other companies including VSNL, ITDC, Jessop and Hotel Corporation, would be done by the current financial year ending March 31, 2002.
To stick to the time-schedule of disinvestment, the government had fixed responsibilities on the secretaries of administrative ministries and they would have to comply with the deadlines, he said. The decision was taken at a review meeting convened by the Prime Minister recently.
He said the department of disinvestment had asked the Securities & Exchange Board of India to find out the entities who were responsible for causing unnatural price movement at the CMC counter soon after the disinvestment in the software company was announced.
To be doubly cautious on the price rigging issue, the government would keep "a close eye" on the share price movements of all the companies which would be put up for divestment.
On the dilution of government stake in Maruti Udyog Ltd (MUL), the minister said three independent valuers had been appointed for the valuation of the company. MUL would float a rights issue shortly.
Unloading government shares would not change the character of enterprises, as feared by many. Shourie said the rights of the workers would be fully protected as had happened in the case of Balco and Modern Foods.
