The commission in its report submitted to the government has recommended to offer 51 per cent of the equity of the HIL, RCFL and RINL and 33 per cent of the HOCL to strategic buyers with management control.

With the objective of enhancing the funding capability of Bhel in rupee as well as foreign currency, the commission has recommended that domestic financial institutions should be offered 10 per cent and another 10 per cent should be offered to foreign private equity funds and FIs. Appropriate role in management to both local and foreign parties has also beenrecommended.

The commission has decided to classify Bhel as non-core because it feels that though it enjoyed a dominating market position in most of its products in regard to supplies to state and Central sector power utilities, the presence of a large number of players including MNCs has made the market fully contestable.

The government has been advised to enter into separate shareholder agreements with the strategic partners to ensure that in the event of their exit from shareholding in Bhel, the government's prior consent or first refusal is taken.

For RINL, the commission has recommended that the government should write-off the accumulated losses of RINL against its entire `share money pending allotment' and preference share capital' and part of equity capital to keep the company from being referred to BIFR and to clean up its balance sheet. Simultaneously, the government should initiate the process of disinvestment of not less than 51 per cent of its remaining equity holding in the company.

Thewrite-off of accumulated losses will not entail any cash outflow and would entail better realisation from the strategic buyers, the report says. Selection of strategic buyers should be done through competitive bidding by pre-qualification of bidders.

Observing that Rashtriya Chemicals and Fertiliser would benefit under a future decontrolled scenario due to its low cost of production of urea, the report says that for future expansion and modernisation it would require more finance which can be arranged by having a strategic partner. The commission has thus recommended offering a minimum of 51 per cent of RCF's equity to a strategic buyer with transfer of management control.

The commission has said that the main reasons for HOCL incurring losses during the last two years is the fact that it has not been able to finance the ambitious capital investment programmes it had made. To report says that to enable the company to acquire new technologies and necessary funds for its expansion, the commission hasrecommended disinvestment of 33 per cent of HOCL shares of the company's equity out of the government holding of 59 per cent to a strategic buyer. The government would retain the remaining 26 per cent of the share. For Hindustan Insecticides, the commission has recommended that the government should offer a minimum of 51 per cent of the equity to a strategic buyer along with management control in order to enable it to diversify its product range with new technology and additional investment.