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Divestment panel may consider Shipping Corp stake sale

India's privatisation panel which is due to meet later on Wednesday is likely to consider a strategic stake sale in Shipping Corp of India, the country's largest shipping firm, a divestment ministry official said.

The official said the Cabinet Committee on Divestment, which will meet at 1800 IST, is also likely to finalise issues related to stake sales in state-run telecoms giant Videsh Sanchar Nigam Ltd, oil marketing firm IBP Co Ltd and some hotel properties.

"The proposal to go in for strategic sale in Shipping Corporation of India is likely to be taken up for consideration," the official who did not want to be identified told Reuters. He did not give details.

In November, divestment secretary Pradip Baijal had said the government planned to go in for a strategic sale in Shipping Corporation, reversing an earlier plan to sell shares in SCI, in which the government owns almost 80 per cent, to public and institutional investors.

"Issues related to stake sales in VSNL, IBP and Hotel Corporation of India will also be taken up," the official said without giving details.

The sale of VSNL, a monopoly provider of overseas calls and India's largest Internet access provider, is billed as the country's biggest privatisation in a decade of reforms.

The government plans to cut its 52.97 per cent stake in VSNL to 26 per cent by selling a 25 per cent stake along with management control to a strategic partner and another 1.97 per cent to VSNL's employees.

The official said the panel would finalise the financial bid details for IBP and VSNL and "most probably invite financial bids soon".

The government owns nearly 60 per cent in IBP and plans to offload a 33.58 per cent stake in the firm. A number of leading global and domestic oil companies are expected to bid for IBP, which has 1,500 retail outlets.

The planned sales are part of an ambitious privatisation programme seeking to raise Rs 120 billion ($2.51 billion) this year.

The government has already sold controlling stakes in computer software and maintenance firm CMC and telecoms gear maker HTL for Rs 2.07 billion in October.

But global economic uncertainty following the September 11 attacks on the United States has made it hard to find buyers, further complicating the privatisation programme already suffering from stiff opposition from labour unions and political parties.

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