Government to disinvest power companies

Wednesday, 17 November 2004, 08:00 Hrs
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NEW DELHI: The government is planning to privatise a part of its shares in two public sector enterprises (PSEs) through an initial public offering, a top official said here Wednesday.

Replying to questions at the Economic Editors' Conference here, Disinvestment department secretary R. Poornalingam said the Power Grid Corporation (PGC) and the Power Finance Corporation (PFC) were in need of funds for their expansion programmes.

"The government might think of diluting its shares in the two companies to extract value for its holding and to compensate the effect of dilution of its equity due to the public issue route," Poornalingam explained.

Stating that the government expected to realise about 60 billion ($1.3 billion) through disinvestments in the fiscal 2004-05, which is more than the targeted 40 billion ($888 million), he said it would follow the same process of disinvestment adopted for the National Thermal Power Corporation (NTPC).

The government has already realised 26 billion by disinvesting five percent of its shares in the NTPC.

"Similar to the NTPC, the government might piggy-back on the public issue of the PGC and PFC and disinvest approximately five percent of its holding in each company," Poornalingam said.

Source: IANS
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