An empowered group of ministers (EGoM), led by finance minister P Chidambaram, on Wednesday, approved a 9.33% stake sale in state-owned MMTC through offer for sale at R60 per share, a steep discount to the current market price of R211.45 per share.
The urgency reflects the government?s resolve to meet the listing requirement of a 10% minimum public float for state-run companies before the August 8 deadline. The auction, which will be carried out on Thursday, is expected to fetch R600 crore.
?We will divest a 9.33% in MMTC tomorrow (Thusday) through the OFS route,? disinvestment secretary Ravi Mathur told reporters after the meeting. MMTC disinvestment would be the first stake sale of the government in the current fiscal. The government targets to raise R40,000 crore from the PSU stake sale in 2013-14.
There is a huge difference between the floor price and the market price of MMTC as the scrip is illiquid, an official in the disinvestment department said.
MMTC closed at R211.45 a piece on BSE, up 2.92% over the previous close. The government currently holds 99.33% stake in MMTC and the stake sale would help the company to meet Sebi?s minimum public shareholding norm.
The stake sale, which was originally slated to take place in March, was deferred on valuation concerns. Since the company?s audited results are out now and after reviewing the final balance sheet for the last fiscal, the disinvestment department was able to decide on the base price for the OFS, the official reasoned.