Employees bidding for public sector units being divested will be given preference if their offer is within 10 per cent of the highest bid. They will be the first option if they match the highest bid.
According to the guidelines proposed by the divestment ministry, the turnover criterion will be waived for employees. They may team up with a bank, a venture capitalist or a financial institution to meet the net worth condition.
The bidding employees will not be allowed to form a consortium with other companies. They have to contribute at least 10 per cent of the financial bid.
If the bidding entity of the employees is a joint venture or a special purpose vehicle, employees must have a controlling stake in it. At least 200 employees, or 15 per cent of the staff strength, whichever is lower, will have to participate in the bid.
The proposed guidelines have been approved by the core group of secretaries on divestment, and will be taken up for clearance by the Cabinet committee on divestment.
As per the proposed guidelines, the term "employee" will include the permanent staff of a public sector unit and the full-time directors on its board.
"We don't want to give any freebies, but the guidelines are meant to facilitate employee buyouts in technology and consulting firms," a government official said.
Employees have to follow the procedure prescribed for participation by interested parties in the process of strategic sale.
This includes filing expressions of interest along with all details as applicable to other investors, and furnishing bank guarantees for payment of the purchase price.
The deal