Steel Authority of India Ltd (SAIL) has scrapped an earlier plan to issue equity shares along with the Government’s planned share sale in the company, the Disinvestment Secretary, Mr Mohammad Haleem Khan, said here on Wednesday.
However, the Government may consider going ahead with the planned divestment in SAIL this fiscal if the market conditions improved.
The Cabinet Committee on Economic Affairs (CCEA) had in April last year approved divestment in SAIL through offer for sale of Government’s equity shareholding of 10 per cent of paid-up capital in conjunction with the issue of fresh equity of 10 per cent of SAIL’s paid-up capital, in two distinct tranches each comprising 5 per cent offer for sale and 5 per cent issue of fresh equity.
Divestment of 5 per cent paid-up capital in Oil and Natural Gas Corporation (ONGC) is likely to be completed in the third quarter of the current fiscal, a senior disinvestment department official said.
“They (SAIL board) have taken a decision that the company will not raise capital through fresh issue of shares. They feel that their cash position is good and they don’t require fresh capital for now. But they have no issues on the Government going ahead with its planned share sale”, Mr Khan said on the sidelines of the Economic Editors’ conference in the capital today.
The Department of Disinvestment is looking into a communication to this effect from the SAIL board. Mr Khan said that the Disinvestment Department will have to again go to the CCEA for revising the earlier plan.
While SAIL has put off plans to issue fresh capital, the department of disinvestment is quite hopeful that the disinvestment transaction in SAIL would be completed this fiscal.