Centre signs agreement for sale of Kamarajar Port, THDC and NEEPCO

The central government signed virtual agreement to conclude strategic sales in Kamarajar Port Ltd, THDC India Ltd and North Eastern Electric Power Corporation Limited (NEEPCO) for which it will receive Rs 13,500 crore (US$ 1.93 billion) from the three deals.

The Department of Investment and Public Asset Management (DIPAM), signed a share purchase agreement to sell the Central government’s 67 per cent stake in Kamarajar Port Ltd to Chennai Port Trust for Rs 2,383 crore (US$ 340.96 million), at least two officials briefed on the development said.

According to officials, DIPAM also concluded the deal to sell the Centre’s 75 per cent stake in THDC India and 100 per cent stake in NEEPCO to NTPC Ltd for more than Rs 11,000 crore (US$ 1.57 billion).

“In the case of Kamarajar Port-Chennai Port Trust deal, the SPA was signed through a scanned copy exchange and the money will be paid on-line by Chennai Port Trust into the government account by Friday noon,” one of the officials said.

He further stated that the board of Kamarajar Port Ltd will hold a meeting to approve the online transfer of shares to Chennai Port Trust.

Though this acquisition, Kamarajar Port Ltd will become India’s only major port that is run as a company among the dozen owned by the Centre, a 100 per cent subsidiary of Chennai Port, which is run as a trust, a governance model the government will soon replace by converting the 11 port trusts into port authorities through an act of Parliament.

A similar process was followed for concluding the strategic sale of government equity in THDC India and NEEPCO to NTPC, the official said.

THDC is a 75:25 joint venture between the Centre and the Uttar Pradesh government. The entire equity of North Eastern Electric Power Corporation Ltd (NEEPCO) is held by the Central government.

Through these stake sales, the government’s receipts will reach close to Rs 50,000 crore (US$ 7.15 billion) in FY20.

The government has released Rs 35,537.32 crore (US$ 5.08 billion) through share sales in PSUs till March 12, 2020.

The Union Budget 2019-20 had set a target of Rs 1,05,000 crore (US$ 15.02 billion) through stake sale in PSUs in FY20, which was scaled down to Rs 65,000 crore (US$ 9.30 billion) in the revised estimates.

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.