CCD to decide fate of two PSUs on January 18

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New Delhi, January 14:: The meeting of the cabinet committee on disinvestment (CCD), scheduled for Tuesday, will now be held on Friday to take a view on the financial restructuring and privatisation of Paradeep Phosphates Ltd (PPL) and Jessop & Co.

The meeting has been rescheduled because of other engagements of Prime Minister Atal Bihari Vajpayee, according to official sources. The CCD will take a view on the huge debts that the two public sector undertakings have incurred over the years. PPL alone has a debt liability of Rs 400 crore.The governments of Tunisia and Morocco are among the creditors of PPL.

The ministry of disinvestment (MoD) has demanded that the debts of PPL should be waived off. The CCD, too, had earlier cleared financial restructuring of PPL.

PPL has been incurring losses for quite sometime and its net worth has turned negative. The government holds the entire equity of the company, and whose paid-up equity is Rs 341.65 crore.

In any case, the PPL is not in a position to pay back the money to pay to Tunisian and the Morocco governments. So, the Indian government has no other option but to pay the dues considering in the interest of the ties with the two countries.

The MoD says that the government better writes off the debts and expedite its privatisation. Without this waiver, no bidder is expected to respond to bid for PPL.

If the finance ministry approves of waiver, the CCD is expected to clear the transaction documents of PPL and call financial bids. The government is selling 74 per cent of its shares in PPL in favour of the strategic partner. Deloitte Touche Tohmatsu India Pvt Ltd has been appointed as global adviser for PPL sale.

Oswal, public sector Rashtriya Chemicals, Spic Coromandal Fertiliser and Indo Gulf (in consortium with a foreign company) have expressed interest in PPL.

The erstwhile Disinvestment Commission had recommended financial restructuring of PPL accompanied by divestment of not less than 51 per cent through strategic sale.

The sell-off panel had also suggested divestment of the balance of government holding through a public offer after improvement in the performance.