New Delhi, March 7
Government's Rs 80,000 crore disinvestment target looks difficult to achieve in the next three weeks of the current fiscal with uncertainties surrounding two key sell-off programmes -- PFC-REC and Pawan Hans Ltd (PHL).
The Power Finance Corporation-Rural Electrification Corporation (PFC-REC) merger deal, by which PFC will buy out the government's stake in REC, is expected to generate close to Rs 15,000 to 16,000 crore as disinvestment proceeds for the government.
As on February 28, the Centre has realised just Rs 56,473.32 crore from disinvestment, against the current fiscal's budget estimate of Rs 80,000 crore.
The PFC-REC deal and Pawan Hans share sale were in the final stages but whether they can be completed over the next three weeks remaining in current fiscal is the question, an official source said.
In the case of the PFC-REC merger, the power finance firm's shareholders will meet on March 19 to approve the takeover of the government's entire stake in REC.
The Disinvestment Department, along with both companies, also has to work out the premium at which the government would sell its stake. The premium could be 14-15 per cent of the average share price, the benchmark being a similar deal involving HPCL and ONGC in 2018.
The deal between the two power sectors financing entities involves PFC buying out government's entire 52.85 per cent stake in REC.
While the government expects Rs 15,000 crore from the deal, it will require to get consent from foreign lenders since REC has a cumulative foreign debt of around $1.85 billion that is slated to mature in phases till 2028.
Obtaining the foreign lender's approval before the March 19 PFC Board meeting is crucial, sources said, adding that PFC is in the process of getting the required consent.
In case of the Pawan Hans divestment, the helicopter producer has managed to generate interest among bidders, a source said.
"The transaction advisor's reserve price for Pawan Hans would be submitted to the Ministry of Civil Aviation. This would then be sent to the Evaluation Committee of DIPAM (Department of Investment and Public Asset Management," he said.
To take a final call on this reserve price, a meeting of Finance Minister Arun Jaitley, who heads the Alternative Mechanism on strategic disinvestment, and Civil Aviation Minister Suresh Prabhu is scheduled to be called after the second week of March, the source added.
According to them, whether all this groundwork for the transactions can be completed within this month is the moot question.
The central government has 51 per cent stake in PHL and state-run explorer ONGC holds the remaining 49 per cent. PHL has a fleet of 46 choppers.
