The Indian government has initiated plans to divest an additional 26% stake in state-owned defence company BEML Limited, formerly Bharat Earth Movers Limited.
The sale, which offers investors management and control of the firm, will progress through a ‘preliminary information memorandum’ issued by the Ministry of Defence (MoD) on 4 January. The sale is expected to be worth about INR10 billion (USD137 million).
The Indian government is looking to divest a 26% stake in BEML, manufacturer of equipment including high-mobility vehicles for India’s Pinaka MBRL system. (BEML Limited)
“The government of India has in-principle decided to disinvest 26% of the equity share capital of BEML Limited through strategic disinvestment with transfer of management control,” said the document.
The sale will downsize the government’s shareholding in BEML to 28%. It currently holds a 54% stake, with most of the remainder owned through Indian stock exchanges.
“The successful bidder could be required to undertake certain obligations… such as employee protection, asset stripping, [and] business continuity,” said the memorandum. It added that final conditions will be specified at the request for proposal stage.
The deadline for submission of expressions of interest is 1 March.
Various conditions apply to the sale including security clearances and the requirement for investors to have a minimum net worth of INR14 billion.
Partnership bidding has been permitted where the lead member has a minimum 51% stake in the investment consortium, although government-owned companies are not allowed to bid.
The government confirmed its plan to sell an additional stake in BEML in 2019. Indian Defence Minister Rajnath Singh said at the time that the divestment is intended to improve BEML’s efficiencies.
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