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ModiCorp approaches DoD for VSNL pie

In a surprising move, Modicorp on Friday announced it has approached the divestment ministry with a "formal intent" for picking up stake in Videsh Sanchar Nigam, where the government is in the process of offloading 25 per cent stake to a strategic partner.

"Our request to allow us to participate is being made with the spirit of only introducing more competition to the bidding process that we feel would allow the government in realising maximum value for VSNL," Dilip Modi, director of Modicorp said in a statement in New Delhi.

Divestment secretary, Pradeep Baijal could not be contacted for the government's response to the proposal.

Explaining the sudden move to participate in the VSNL divestment process, the statement said, "Modicorp's interest in VSNL comes in light of recent significant changes in the environment and the market capitalisation of the public sector enterprise, which makes the acquisition more capital efficient and affordable."

The company is willing to complete a limited due-diligence in 15 working days, in order to make a binding offer by the end of January.

"Significant changes have taken place since the time bids were first invited for VSNL including changes in ISD policy. In addition, the restructuring of assets of the company has also made it more attractive and affordable," Modi said.

The development comes at a time when VSNL privatisation is in a fairly advanced stage with the Cabinet Committee on Divestment this week finalising draft transaction documents for the telecom corporation's divestment for which three bidders are understood to be in the race.

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