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Selloff ministry sees deal on oil firms by Dec 7

BS Economy Bureau in New Delhi

The divestment ministry is hoping that there will be a consensus on the sale of Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd by December 7, the deadline, while the process of a public issue in Maruti can start next month.

"We are hopeful that the divestment process will continue forward. Meetings are taking place on the divestment of BPCL and HPCL and a consensus may emerge within the three-month deadline that expires on December 7," Divestment Secretary Pradip Baijal told reporters on the sidelines of the World Economic Forum meeting.

The Cabinet Committee on Divestment had, on September 7, postponed the sale of the two downstream oil companies by three months in the absence of a political consensus on the method of divestment.

Petroleum Minister Ram Naik had insisted on an initial public offer in both the companies to expand their expansion plans before strategic sale while Divestment Minister Arun Shourie had favoured strategic sale, leaving the new management to decide on the expansion plans.

Defence Minister George Fernandes had also joined the debate by writing to the prime minister, asking for a 'mid-course review' of the government's divestment policy.

On Maruti, Baijal said the recent improvement in market sentiment had given the government confidence to come up with an IPO of 26 per cent equity.

The inter-ministerial group was giving final touches to the prospectus and, if approved, the book-building process for the issue could begin next month.

Earlier, speaking at the session, the divestment secretary pointed out that in the countries that had exited the public sector, there were initial problems.

"The debate we are seeing in our country is good for the process. In the United Kingdom, three years were spent in educating the political class on divestment, and even after that the debate continued," he said.

Baijal said the country's experience had shown that strategic divestment got the best price for government holdings.

He, however, added that in the future, the government could even consider selling its equity through public issues if the market depth allowed it to do so.

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