An agreement to this effect was signed on Tuesday between ANZ Grindlays and the ministry.

With the signing of this agreement, MFIL has become the first PSU to select its global advisor for disinvestment/strategic sale, an official release stated.

MFIL was one of the public-sector undertakings recommended for disinvestment in the first phase by the disinvestment commission for disinvestment/strategic sale of government equity.

MFIL had registered a turnover of Rs 17,537 lakh during 1997-98 against a turnover of Rs 16,682.25 lakh during 1996-97. The company earned a profit of Rs 16.45 crore during 1996-97 against Rs 11.52 crore in 1995-96. MFIL paid Rs 222 lakh as dividend to the government at the rate of 20 per cent of the equity as on March 31, 1997, for 1996-97.

The company's profitability wasexpected to be affected during 1997-98 owing to various factors, including withdrawal of subsidised wheat scheme with effect from November 1, 1996, which led to the hike in sale price of bread which, in turn, had affected commercial sales, sources said.

Increase in establishment as well as input costs had been cited as other factors that had eroded MFIL profitability.

MFIL, which had a paid-up capital of Rs 11.58 crore as on March 31, 1998, against an authorised share capital of Rs 15 crore, had outstanding loans repayable to the government to the tune of Rs 5.36 crore, sources said.