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Govt may not allow solo bids by BPL, Modi for VSNL

BS Economy Bureau

The government may not allow BPL Communications and ModiCorp to bid for Videsh Sanchar Nigam Ltd.

Arun Shourie, Divestment Minister, told Business Standard the government is examining the issue but it would be difficult to allow fresh bidders at such an advanced stage.

"We will examine the case and announce a decision soon. But I think it will be difficult for us to allow new bidders. If they want to bid for VSNL, they could form a consortium with any of the three bidders in the fray." Shourie said.

Shourie said that, if permitted by the policy framework, BPL could bid for BSNL by joining back the Dishnet-Tycom consortium.

Both ModiCorp and BPL have sent expression of interest for participating in the bidding for 25 per cent stake in VSNL.

BPL had initially formed a consortium with Dishnet and Tycom to participate in the bidding but later pulled out of the alliance. However, with the recent easing of the bidding norms announced by the government, BPL decided to re-enter the fray on its own. The company also requested for a relaxation of the net worth requirement of the bidder.

Earlier this week, ModiCorp had also sought permission to participate in the VSNL divestment process. The company had said that the government's decision to hive off VSNL's real estate as a separate entity and give the most favoured status to VSNL for routing international calls from MTNL and BSNL has improved the business potential for VSNL.

The government had received six bids for picking up 25 per cent stake in VSNL. Of this three companies i.e. Bharti, Birla and Videocon dropped out, leaving Reliance, Tata and Dishnet-Tycom in the fray. The price bids from these three companies will be invited by the end of January.

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