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July 18, 2001
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Money > Business Headlines > Report July 18, 2001 |
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Valuation delays may affect CMC sell-offBipin Chandran & Mamata Singh Divestment of the state-owned computer company -- CMC Ltd, is likely to miss the August deadline due to a delay in the valuation of the company. "The government is yet to take a final view on the valuation of the company. This is one of the factors leading to the delay in CMC's divestment," a government source told Business Standard on Tuesday. According to the source, the government is still working with the global advisor KPMG, to finalise the valuation of the company. "We expect to finalise the valuation soon. However, since CMC is a listed company, the valuation we are looking at will be based on the market price of the company's shares," the official said. The Centre, which owns 83.37 per cent stake in CMC, plans to divest up to 57.31 per cent through a strategic sale, employees stock option plan and other means. The government had invited strategic investors through an international bid in February this year. Another reason for the expected delay is the failure on the part of the employees to reach an agreement with the financial institution, which is supporting the union. The employees have also decided to be one of the bidders for the government's stake in CMC. "The agreement between the employees and the financial institution that is supporting it in participating in the divestment process is yet to be finalised. The government is keen on giving some more time to them," the source said. The union government had fixed Rs 3 billion as the minimum networth required for companies willing to participating in the divestment of CMC. In the case of consortiums and joint ventures --- formed or proposed for the purpose --- the networth criteria will apply to the group as a whole. Leading infotech firms like Tata Consultancy Services, Wirpo, Hewlett Packard and Saiinfo, had submitted expression of interest for acquiring government stake in CMC. Powered by YOU MAY ALSO WANT TO READ:
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