JOIN USThe Cabinet Committee on Economic Affairs (CCEA), at a meeting chaired by Prime Minister Manmohan Singh approved the proposal for raising additional equity by the SAIL to the extent of 10 per cent of the paid up equity and divestment of government’s holding by 10 per cent through offer for sale to be carried out in two separate tranches.
Briefing reporters after the meeting, Home Minister P Chidambaram said “this exercise will help raise Rs 8,000 crore each for government and SAIL,” adding that this will be done in two tranches with a 5 per cent pre and five per cent Follow on Public Offer (FPO) in each tranche and 5 per cent sale of government
equity. The further offerings along with disinvestment will be carried out as per Sebi regulations and procedure adopted by the Department of Disinvestment. Post divestment, government equity in the SAIL would come down to 69 per cent from existing 85.82 per cent.
“It is expected that the enhanced public holding in SAIL would lead to greater depth in the market. As a result of the secondary offering and equity dilution there would thus be larger public ownership of the company leading to increased accountability,” Chidambaram said.