New Delhi: Bids for big-ticket disinvestment of Videsh Sanchar Nigam Ltd (VSNL) close on Tuesday, even as big houses like Tatas are believed to be in the race for acquiring the controlling stake in the international voice carrier.

“Yes, we are closing the bids on Tuesday,” senior officials in the Department of Dis investment told a news agency on Monday.

The Cabinet Committee on Disinvestments had decided on February 1, 2001 to sell 25 per cent of its equity in VSNL and transfer the management of the cash firm to a strategic partner.

Subsequently, State Bank of India (SBI) Capital Market and Credit Suisse First Boston were appointed as the global advisors to the VSNL disinvestment. While the advisors are believed to have asked for extension of date for the submission of “Expression of Interest”, the government is determined to stick to April 10 as the final date for accepting bids.

Big time industry leaders like the Tatas are believed to be in the race and are seeking alliance with some global players to form a consortium for making a bid. Other key players likely to bid for VSNL are Reliance and the Bharati Group.

The government, while taking a decision to disinvest its stake in VSNL also took a decision to strengthen the company Board. Industry leaders like NR Narayan Murthy and Subodh have been inducted into the VSNL Board, which has also been given full autonomy to enter into any new areas of business like the mobile telephone and Value Added Services.

As per the existing shareholding pattern, the government holds 52.97 per cent of the stake in VSNL and 30 per cent is in the American Depository Receipt (ADR) while 17 per cent floats in the domestic capital market. Analysts feel that the strategic partner could pick up additional equity, over and above 25 per cent, from the ADR or domestic market, and be in the driver's seat.

The sectoral cap of 49 per cent foreign direct investment in the telecom sector will continue in the case of VSNL.

UNI

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