The disinvestment ministry has turned down the finance ministrys proposal to sell Balmer Lawrie in parts rather than in its present amalgamated form.
The disinvestment ministrys stand could result in a loss of over Rs 300 crore to the exchequer, government officials said.
The company in its present form would fetch not more than Rs 200 crore, whereas if each unit was sold as a separate entity, it could raise more than Rs 500 crore, they argued.
Balmer Lawrie has eight units dealing with travel, leather chemicals, container freight stations, tea exports, industrial packaging, greases, projects and cargo.
The last four are considered to be the core activities of the company, and the first four are its "outer core" businesses.
The petroleum ministry said while the core activities of the company could be sold in the amalgamated form, since it had 65 per cent market share in industrial packaging, the other units could be divested individually. The finance ministry, on the other hand, said all the units would be sold separately.
The finance ministrys views are shared by some other ministries and government departments, and the employees of the company.
They are of the opinion that the invitation for expressions of interest floated by SBI Caps, the government-appointed merchant bankers, need to be scrapped and fresh bids invited for individual units.
These views have gained more currency after the recent experience of disinvestment in Centaur Airport Hotel in Mumbai, which has been resold by its buyer, Batra Hospitality, to Sahara at a premium of around Rs 35 crore.
It is being apprehended that a similar thing can happen with Balmer Lawrie, where the buyer of the integrated company will later start selling the units individually.
However, the disinvestment ministry is of the view that it is too late to retract. Expressions of interest have been put in by 16 companies and Balmer Lawrie will be open to bidders tentatively from November 5.
