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Bidders to complete IPCL due diligence by mid-Feb

Bidders for a stake in Indian Petrochemicals Corp Ltd are expected to complete due diligence of the company's assets by the second week of February, an IPCL official said on Wednesday.

The government is likely to invite price bids for a 26 per cent stake in IPCL along with management control in the third week of February, the official, who did not want to be named, told Reuters.

The suitors for IPCL include domestic detergent maker Nirma Ltd, petrochemicals major Reliance Industries Ltd and state-owned Indian Oil Corp.

"Nirma is expected to complete due diligence by January 15 to be followed by Reliance and IOC. The process should be over by the second week of February," he said.

The government, which owns 59.75 per cent of IPCL, intends to sell a further 25 per cent later through open market sales with the winner of the first round having the right of first refusal.

IPCL, India's second largest petrochemicals maker, has the capacity to produce over a million tonnes of petrochemical products per year.

Two of its three plants are located in Gujarat -- at Gandhar and Baroda. The third plant is located at Nagothane in Maharashtra.

Nirma officials are currently inspecting IPCL's manufacturing facilities and have also been offered access to a data room set up by the company at its Mumbai office, the IPCL official said.

Once due diligence is completed, the government would invite final price bids, he said.

While announcing the decision to sell a 26 per cent stake in IPCL on November 13, the government had vowed to wrap up the sale process in 90 days.

"The process certainly is on a fast track. A draft of shareholders agreement is ready and government should be closer to keeping the deadline for the sale," the official said.

The stake sale in IPCL is part of the Indian government's ambitious plan to mop up Rs 120-billion through privatisation.

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