SAIL divestment plans gets approval from finance minister

Saturday, 24 Oct 2009

Steel Authority of India Limited announced that the finance ministry has given it’s in principle approval for 20% disinvestment of the steel giant. The divestment comprises 10% equity dilution by the government and the company issuing additional 10% shares.

SAIL in a filing to the Bombay Stock Exchange said that "Ministry of Steel has communicated to the company in principle approval of the Department of Disinvestment for further public offer equivalent to 10% of existing paid-up equity capital by SAIL.”

It further said that the finance ministry has also given its approval for disinvestment of equivalent size of equity held by the government of India in two discrete tranches, each containing five per cent of FPO plus five per cent offer for sale.

However, the company said that the proposal would be subject to approval of the Cabinet. It added that "This is subject to fulfillment of certain conditions, including obtaining approval of the Cabinet Committee on Economic Affairs."

It further added that the timing of the stake sale and public offer would be decided after CCEA nod.

The filling said that "After approval of CCEA, the timing for the above offers would be decided considering, inter-alia, SEBI guidelines and prevailing market considerations and also fulfillment of conditions, if any, stipulated in the CCEA approval.”