VST stake sale: Andhra extends invitation to all

Just a day before the deadline for registration to participate in the disinvestment exercise of Andhra Pradesh government's 4.69 per cent stake in VST, the state public enterprise department has widened the scope by extending open invitation to all the interested parties and postponed the deadline by another five days to August 19.

The public enterprise department had earlier sent letters only to 10 parties, which have one per cent or more stake in VST, seeking their participation in the disinvestment exercise.

These include two investment arms of BAT, ITC's subsidiary Russel Credit, stock broker Damani-controlled Bright Star Investments and all the public sector insurance companies.

According to sources, the public enterprises department has widened the scope as some more institutional players including those with interests in tobacco business have shown interest to offer their bids.

"Since our aim is to get better response and good price, we have decided to give an open invitation to bid for VST shares. However, to prevent speculative players, we may put some lock-in period clause on subsequent sale of shares acquired from us, subject to its conformity with the existing rules an regulations", the source said.

Upon registration, the department will provide the information on terms and conditions of the offer and send a prescribed offer form to make an offer to purchase the shares.

The public enterprise department feels that, despite the open invitation, only serious players will come forward since they have to bid for the entire lot of 7.23 lakh equity shares of VST and part-bidding is not allowed.

Though the department has extended the deadline up to August 19 for registration, the outer deadline for submission of price bids with a demand draft or a bank guarantee for 25 per cent of the offered price remains same as August 29.

If the government accepts the offer, the balance payment will have to be made by the successful bidder by September 8 and the transfer of shares will take place immediately on receipt of payment.