Share Prices Of Shipping Corporation Jump After Report About Govt Inviting Bids For Privatisation
The central government is planning to invite bids for the privatisation of SCI next month, reported Reuters citing two government officials
Share prices of the government-owned Shipping Corporation of India Ltd (SCI) surged about 5 per cent to 85.17 per share on Tuesday after report regarding the Centre's privatisation plan. The central government is planning to invite bids for the privatisation of the SCI next month, reported Reuters citing two government officials.
The plan was announced earlier in 2019, with the Center planning to privatise a number of PSUs, including selling its stake in SCI. It was stalled due to regulatory delays.
Shipping Corporation owns and operates bulk carriers and crude oil tankers, among others. The firm had to spin off its non-core assets before the government could sell 63.75 per cent stakes. According to the report, the roadblock was regarding the amount of funds to be transferred to the demerged entity.
SCI completed the spinoff last month after getting regulatory approval late in February. The separated company, called SCI Land Assets Ltd, will have to be listed before April 23, one official told Reuters, adding that the government plans to do that soon.
According to the report, they said that the government now aims to invite financial bids for SCI, which owns and operates around one-third of India's total tonnage, by mid-May. A final decision will be taken on April 14 by a panel headed by India's cabinet secretary. This panel will also consider a proposal to invite initial bids for selling the government's 31 per cent stake in Container Corporation of India Ltd, which has been delayed since 2020.
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The Ministry of Corporate Affairs (MCA) received a request for the planned demerger from the Shipping Corporation of India (SCI) last year. A separate firm called Shipping Corporation of India Land and Assets would receive all of SCI's non-core businesses under this plan.
The government said that this was not an essential business and did not warrant government involvement. As a result, the government made the decision to leave this industry.