Govt scraps privatisation of SAIL’s Bhadravathi steel plant

After BPCL, this is the second instance when the government withdrew the strategic stake sale offer due to insufficient bidder interest

SAIL logo-Bhadravati Plant
Due to insufficient bidder interest in SAIL’s Bhadravati steel plant in proceeding further with the transaction, the government decided to annul the EoI and terminate the present transaction

The government on Wednesday scrapped the privatisation of SAIL’s Bhadravathi steel plant due to insufficient bidder interest.

The Department of Investment and Public Asset Management (DIPAM) in a statement said the strategic sale of SAIL’s Visvesvaraya Iron and Steel Plant (VISP), Bhadravathi in Karnataka, had received multiple Expression of Interests (EoIs) and bidders also conducted due diligence.

“However, due to insufficient bidder interest in proceeding further with the transaction, government of India, with the approval of Alternative Mechanism (Empowered Group of Ministers) has decided to annul the EoI and thereby terminating the present transaction,” DIPAM said.

Also read: Disinvestment target cut by ₹97,000 cr for FY22, FY23 target set at ₹65,000 cr

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2016: Cleared for disinvestment

The cabinet had in October 2016 cleared strategic disinvestment of SAIL’s 100 per cent stake in VISP. Following that, the EoI from bidders was invited on July 2019.

This is the second instance when the government withdrew the strategic stake sale offer due to insufficient bidder interest.

BPCL plan scrapped

In May, the government scrapped plans to sell its 53-per cent stake in BPCL, saying that majority of bidders have expressed their inability to participate in the current privatisation process due to prevailing conditions in the global energy market.

BPCL too had received multiple EoIs and at least three bids had come in. However, the privatisation was stalled after two bidders walked out over issues, such as lack of clarity in fuel pricing, with just one bidder left in the fray.

Also read: Bank privatisation: The key parameters the RBI did not talk about

Last month, the DIPAM terminated the sale of its 100 per cent stake in Central Electronics Limited (CEL) and disqualified the successful bidder Nandlal Finance and Leasing Private Ltd for not meeting the eligibility criteria.

 

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