Facing opposition from heavy industry ministry regarding the divestment in Bharat Heavy Electricals Ltd, the finance ministry is looking at block deal option for the company as in the case of Indian Oil Corp Ltd, a finance ministry official said.
"We are looking at the option of block deals," the official said, adding that offer for sale route is also being considered. A block deal is deal where a minimum quantity of five lash shares or shares with a minimum value of Rs 5 crore are transacted through a single transaction window of the stock exchange.
The heavy industry and public enterprises ministry, the parent ministry for BHEL, is pushing for cross-holding in the company similar to Indian Oil, instead of selling shares in the market.
The Empowered Group of Ministers on divestment had last week approved cross-holding in Indian Oil through block deals.
The ministerial group agreed to cross-holding by Oil and Natural Gas Corp Ltd and Oil India Ltd in Indian Oil after the petroleum and natural gas ministry opposed the divestment in the oil marketing company in the market.
According to the proposal, ONGC and Oil India will buy government's 10 per cent stake in Indian Oil for about Rs 4,800-5,000 crore.
“If the block deal plan materialises, the sale can take place at plus or minus 1 per cent of the trading price," the official said, adding the finance ministry wants to raise money to meet this year's divest target of Rs 40,000 crore.
The Cabinet Committee on Economic Affairs had approved 5 per cent divestment in BHEL in August 2011, but no action has been taken since then. The government holds 67.7 per cent stake in BHEL.
In the current financial year ending March, the government aims to raise Rs 40,000 crore through divestment in public sector companies and Rs 14,000 crore through stake sale in non-government companies.
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