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Ashok Dasgupta

NEW DELHI, May 23

COMING from the horse's mouth, it's more or less official now, though not ``officially'' announced as yet. The high-profile proposed strategic sale of the Government's equity in National Aluminium Company Ltd (Nalco), the top low-cost producer of aluminium globally, has been deferred, which in bureaucratic parlance is meant to mean ``postponed indefinitely''.

``The Government has taken a decision that the strategic sale will be put off, but at least the IPO will be done by September and we are working towards meeting that deadline,'' said Mr Munesh Khanna, Managing Director, N.M. Rothschild & Sons (India) Pvt Ltd, in an exclusive chat with Business Line.

Initially, Rothschild, in partnership with ABN Amro, had been given the full mandate sometime in August last year to work on the domestic IPO (initial public offering), the international IPO as well as the strategic sale.

``Our brief, when we (ABN Amro-Rothschild) were awarded the assignment, was that we were the global coordinators for the domestic IPO, the international IPO and strategic sale... As of right now, the strategic sale has been deferred,'' Mr Khanna said.

Evidently, the decision to defer the strategic sale was following the political overtones as a fall-out of the violence during the agitation staged by the local people in Orissa when interested corporate parties such as Hindalco had ventured to the plant site for due diligence.

``All these incidents started happening once the mandate was awarded and we started working and people were being invited for the due diligence,'' he said.

Due diligence for Nalco, it may be recalled, came to a standstill after workers opposing the aluminium major's privatisation stopped a team of potential bidders from inspecting the main plant in October last year. In fact, it is believed that the Prime Minister's Office (PMO) had to step in to instruct the Disinvestment Ministry not to send any more bidders for undertaking due diligence of Nalco's plant following resistance from various quarters.

Despite this, the then Secretary, Disinvestment, Mr Pradip Baijal, had at that time stated that there would be no public issue of Nalco before its strategic sale.

In fact, late last year, Nalco received an `in-principle' clearance from the market regulators in India and the US — the Securities Exchange Board of India (SEBI) and the Securities Exchange Commission — to make a simultaneous issue of IPOs in India and the US. This was deemed as clearance of a major hurdle in the proposed three-tier disinvestment in Nalco.

As of now, what is likely to be pushed through is a domestic IPO of 10 per cent of Nalco's equity and an international IPO of 20 per cent to reduce the Government's holding by 30 per cent from the 87.19 per cent stake held at present.

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