The Divestment Ministry on Friday was spurred into action to restart the sell-off process, virtually halted due to controversies, after a favourable decision at the prime minister's meeting with his Cabinet colleagues on Thursday to go ahead with divestment in oil PSUs -- HPCL and BPCL.
The ministry would now seek a meeting of Cabinet Committee on Divestment after December 11, a day when the core group of secretaries on divestment is scheduled to meet to sort out a number of pending issues including those relating to Hindustan Cables and the public sector newsprint unit, NEPA.
Divestment Minister Arun Shourie is likely to take a proposal to the CCD on the quantum of HPCL equity to be put on the block for a strategic partner, to pave the way for seeking presentation from over a dozen bidders for becoming global advisors.
Shourie summoned top ministry officials at his chamber despite the Eid holiday to take stock of the situation with the acceptance of a formula involving public offering of equity in the Bharat Petroleum Corporation Ltd and privatisation of the Hindustan Petroleum Corporation Ltd through strategic sale route at Thursday's informal meeting.
Sources said that CCD was being suggested after December 11, keeping in view the December 12 polls in Gujarat, a factor cited by some of the participants at Vajpayee's meeting for deferring a decision on oil PSUs for some more time.
Divestment Secretary Pradeep Baijal along with three joint secretaries in the ministry was closetted with Shourie for over an hour, presumably to decide on the contents of the statement the divestment minister is scheduled to make in Parliament on the direction of the prime minister.
Sources said that the ministry had completed the paper work in at least ten PSUs, including Shipping Corporation of India, Balmer Lawrie, Engineers India Ltd and National Fertilisers Ltd, where a final nod was awaited.
However, in the case of National Aluminium Company where the due diligence process was halted a few weeks ago after a hostile reception to a team of officials from a bidder Hindalco (an Aditya Birla Group Company), the ministry is likely to go slow till the issues with the Orissa government were resolved.
The enthusiasm of divestment ministry officials emanated from the spurt in share prices of PSUs in general and HPCL and BPCL in particular in response to the resolution of divestment deadlock, which was haunting the entire process for the last three months.
HPCL, where the government may give management control to strategic partner after divestment, scrip shot up by a massive 22.1 per cent to close the day's trading at Rs 274.85, while BPCL rose by an impressive 10.5 per cent to Rs 215.65.
The solution arrived at Thursday's meeting was also being interpreted as a verdict for privatisation of both HPCL and BPCL, where the government equity would come down to below 50 per cent after the public offering.
As of now the government has 51 per cent equity in HPCL and over 66 per cent in BPCL.