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Govt sells IBP to IOC, Tatas bag VSNL

The government on Tuesday mopped up Rs 25.93 billion from the divestment of its stake in IBP and Videsh Sanchar Nigam Ltd.

Indian Oil Corporation bought 33.58 per cent of the government's stake in IBP for Rs 11.54 billion against the reserve price of Rs 3.37 billion, Divestment Minister Arun Shourie told reporters in New Delhi.

While the Tatas bought 25 per cent of government stake in the telecom giant VSNL for Rs 14.39 billion against the reserve price of Rs 12.18 billion. Reliance quoted Rs 13.47 billion.

In the case of IBP, second bidder Royal Dutch Shell quoted a price of Rs 5.95 billion, the minister added.

Earlier, Minister for Heavy Industries Manohar Joshi told reporters: "IOC has emerged the top bidder for acquiring 33.58 per cent government stake in IBP. Tatas will be acquiring 25 per cent government stake in VSNL."

Tatas and Reliance were the only two bidders who had last week given the financial bids for 25 per cent of government's 53 per cent stake in the telecom giant whose monopoly over overseas communication is slated to end on March 31, 2002.

With the control over IBP, IOC which has a market share of 55 per cent, would have an access to over 1500 retail outlets of the stand alone marketing company apart from adding on another 5.6 per cent market share.

Reliance, which had given two bids for IBP, could not be reached for comments after losing out on both the big ticket PSUs - VSNL and IBP.

Kuwait Petroleum, Hindusthan Petroleum and Bharat Petroleum were the other IBP bidders.

IOC chief, M A Pathan, jubilant over the successful bidding, said he would call shortly a board meeting to complete the transactions. He said acquisition of IBP would help his company consolidate its marketing network by virtue of getting retail outlets having an effective market share of 8.4 per cent.

Tata chief Ratan Tata dubbed the acquisition of VSNL as "meaningful for the group in providing end-to-end quality services", and added "this will facilitate the enhancement of the spectrum of our telecom services."

Shourie said that Centaur Airport hotel in Mumbai would be sold to A L Batra of Radisson (Delhi) for Rs 830 million against the reserve price of Rs 780 million.

Singapore-based Silverlink Holdings successfully bid for Lodhi Hotel New Delhi at a price of Rs 762 million against a reserve price of Rs 404 million.

Sushil Gupta and Associates of Hyatt got Qutub Hotel of ITDC for Rs 357 million against a reserve price of Rs 310 million, while Laxmi Vilas Palace Hotel, Udaipur, went to Bharat Hotels for Rs 75 million against a reserve price of Rs 61 billion.

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