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Nalco divestment gets under way

Gaurav Raghuvanshi in New Delhi

The government will set in motion the process of divestment in National Aluminium Company Ltd this week by inviting expressions of interest for the strategic sale of 29 per cent equity in the company.

The process for a public offer of 10 per cent of the company's shares will simultaneously be initiated, which will be followed by an American Depository Receipt issue of 20 per cent.

"The advertisements inviting EoIs for the strategic sale will appear by August 12. As per the decision of the Cabinet Committee on Divestment, we will start working on all the three phases of divestment in Nalco simultaneously," a divestment ministry official said.

The process of strategic sale would take six to eight months while the public issue would take about four months, the official said, adding that in the case of Nalco, the domestic issue would be completed a couple of months before the strategic sale.

"We realised that having the public offer just before the strategic sale will enable the government to get the best value for the company because the investors in the domestic float will be attracted by the open offer after the strategic sale," the official said.

The three-phase divestment in Nalco would bring down the government equity in the company from 87.15 per cent to 26 per cent, the official said.

ABN Amro-Rothschild-Enam combine is advising the government for the entire three-phase divestment, while J P Morgan-ICICI are acting as co-book runners for the domestic and the ADR issues.

Nalco made a net profit of Rs 4.07 billion on a turnover of Rs 24.21 billion in 2001-02. In 2000-01, the company's net profit stood at Rs 6.56 billion on a turnover of Rs 23.71 billion.

The company accounts for nearly one-third of the primary aluminium produced in the country. Nalco owns the largest bauxite reserves in Asia.

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