The Department of Investment and Public Asset Management (DIPAM) will pilot a proposal to the Cabinet seeking its nod to reverse an earlier approval to privatise Dredging Corporation of India Ltd (DCI), and to sell the government entire stake in the dredging contractor, instead, to three state-owned port trusts.
In 2017, the Cabinet Committee on Economic Affairs (CCEA) approved divestment of the government’s 73.47 per cent stake in DCI through strategic sale along with transfer of management control.
The Shipping Ministry has since favoured selling the government’s entire holding in DCI to Visakhapatnam Port Trust, Paradip Port Trust and New Mangalore Port Trust to tap the “strategic advantage” of such a plan. The Ministry has forwarded the proposal to DIPAM and the asset sale department will move a note to the Cabinet, a Ministry official briefed on the plan said.
“The Cabinet will first have to take a decision whether it wants the three major port trusts to buy the government stake in DCI or not,” the official said.
Once the Cabinet agrees to this, the three major port trusts will appoint merchant bankers for conducting due diligence and share valuation. While DIPAM had earlier appointed a transaction advisor for the sale, those who are purchasing the shares will do their own due diligence, the chairman of one of the three major port trusts that are keen on buying the dredging company, said.
DIPAM had picked RBSA Capital Advisors LLC as transaction advisor to the sale, while Link Legal India Law Services and Protocol Insurance Surveyors and Loss Assessors Pvt Ltd are acting as the legal and valuation advisors.
DCI is India’s biggest dredging firm by fleet size and market share. The deal is expected to fetch ₹1,500 core to the government’s divestment kitty at current share price of the company.