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Paramvir Singh
Mumbai, Aug 9: Credit Rating Information Services of India Ltd (Crisil) has recommended divestment of the government stake in Bharat Heavy Electricals Ltd (BHEL) in favour of foreign strategic partners. The rating agency has completed the business-viability report on BHEL--an assignment given by the Disinvestment Commission. It will submit the report to the commission later this week, sources close to the agency said.
The commission had given the mandate to Crisil to prepare a report on the proposed divestment of the government stake in BHEL and develop a "valuation paradigm" and the "approach for disinvestment".
Sources said Crisil has recommended divestment of stake in favor of foreign strategic partners who can bring in significant financial, technical and marketing strengths into the power sector utility which takes care of more than 65 per cent of power related needs of India.
According to sources, at least three global energy utilities--Asea Brown Boveri, Siemens and GE--are in the fray forpicking up a stake in BHEL. However, the BHEL management is keen to rope in a domestic partner. Crisil has recently made a presentation to the BHEL management on the issue where the differences in the perception of the rating agency and the BHEL mangement came to the fore. While Crisil feels that a foreging strategic partner must be brought in to strengthen the public sector outfit, the BHEL management favours a local partner.
"The extent of proposed disinvestment and the pricing for the same has not been suggested by Crisil. It will be finalised by the Union government in consultation with the Disinvestment Commission," sources said.
Industry sources, however, said that the government should bring down its equity to below 50 per cent from the present 66 per cent and should be looking at a premium of Rs 340 on its Rs 10 shares.
The Government had earlier offloaded 34 per cent in the company in favour of the public and institutions.
BHEL is one of the major power plant equipment manufacturers. Itoffers a wide spectrum of equipment, systems and services in the field of power, transmission, industry, transportation, oil & gas, non-conventional energy sources and telecommunications. BHEL has developed capability to produce a variety of electrical, electronic and mechanical equipment and meet the demands of a host of industries like fertilisers, petrochemicals, refineries, coal, steel, aluminium, paper, sugar, rubber, cement and mining, transportation, transmission, telecommunications.
The PSU is exporting its products and services to more than 52 countries including USA, UK, France, Germany and Japan. Export orders executed by BHEL range from individual products to complete power stations on turnkey basis, residual life assessment studies, retrofitting / refurbishing and overhauling of existing equipment.
THE STRORY SO FAR
July 6: Ties up with German company for pollution control equipment
July 21: Bags Rs 106 crore order from Oman
July 23: Commissions Bakreswar thermal power project42 days before time
July 29: Ties up with Babcock Borsig Power GmbH, Germany.
Aug 9: Bags NTPC's Rs 1,400 crore Talcher project
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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