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August 1, 2001
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Money > Reuters > Report August 1, 2001 |
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Videocon opts out of race for VSNLVideocon group has pulled out of the race to acquire state-run telecom giant VSNL in which the government is selling a controlling stake to a private strategic investor, a senior official said on Wednesday. "We withdrew our bid on July 13," Venugopal Dhoot, chairman of Videocon International, one of India's leading consumer goods makers, said. Dhoot did not say why the group withdrew its bid for Videsh Sanchar Nigam Ltd, the monopoly overseas telecommunications carrier and the country's largest Internet access provider. But analysts said they had expected the group to exit from the race after the government disqualified its bid for state-run carrier Indian Airlines when it was named by regulators in an alleged share-price rigging case. The government, which holds a 52.97 per cent stake in the New York Stock Exchange-listed VSNL, plans to bring its stake down to 26 per cent by selling 25 per cent along with management control to a strategic partner and another 1.97 per cent to the firm's employees. VSNL's sell-off is viewed as one of India's most ambitious privatisation in a decade of economic reforms because it is the first time the government is selling a controlling stake in a profitable company. Previous privatisation attempts have mostly involved loss-making companies or the sale of piecemeal stakes in others. Videocon's exit is another blow to the high profile privatisation which got off to a good start with the government receiving six bids for the firm. Bidders who had expressed interest in the company, besides Videocon, included three of India's biggest conglomerates, the Reliance, Tata and Birla business houses; a consortium of telecom group Bharti Enterprises and Singapore Telecom; and a consortium led by BPL Communications. Only three of the original bidders remain in the race now with the Birla group and the Bharti-SingTel combine also dropping out of the race. The Birla group was the first to pull out of the bidding in June. The Bharti-SingTel combine pulled out last week.
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