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Crawford Bayley, Amarchand, FoxMandal, Luthra profit from privatisations

Disinvestment in mining sector
Disinvestment in mining sector

Crawford Bayley has picked up the latest Government disinvestment mandate for India's single largest iron ore producer and exporter National Mineral Development Corporation (NMDC), following Amarchand Mangaldas, Fox Mandal Little and Luthra & Luthra bagging the three other disinvestments of the past four months.

Mumbai firm Crawford Bayley has been appointed as the domestic lead legal advisor on the proposed disinvestment of 8.38 per cent equity in NMDC through a follow-on offering. The issue is expected to garner approximately Rs 14,000 crores for the Government depending on the final issue price.

A senior official at the Department of Disinvestment has confirmed Crawford Bayley's appointment to Legally India, with capital markets partner Sanjay Asher leading the domestic legal team on the matter for Crawford Bayley.

Citigroup, Kotak Mahindra, RBS Equities, UBS Securities, Morgan Stanley and Edelweiss Capital have been shortlisted as financial advisers in NMDC’s public offer.

Alongside NMDC, the Government of India (GOI) has also announced to sell off stakes in three other central public sector undertakings (CPSUs) in the past four months: National Thermal Power Corporation (NTPC), rural projects company Rural Electrification Corporation (REC) and hydro-electric power company Satluj Jal Vidyut Nigam (SJVN).

Satluj Jal Vidyut Nigam (SJVN)
FoxMandal Little and international firm K&L Gates have been appointed to act as counsel to SJVN, which is a joint venture company between the central and Himachal Pradesh Governments.

FoxMandal Delhi senior partners Manish Sharma and Ajit Yadav and Singapore K&L Gates partner Kevin Murphy are leading the teams on SJVN.

Yadav said: “GOI proposes to disinvest 10 per cent of its holdings in the SJVNL through offer for sale of shares to qualified institutional buyers [QIBs] and others in accordance with regulatory framework as applicable... It is a very efficiently run PSU seen from a management perspective.”

“In July, the UPA Government had restarted the disinvestment program for divesting GOIs holdings in profitable and identified PSUs," he added. "The aim seems to be to unlock the cash in such PSUs and find money for vital tasks like social reforms."

National Thermal Power Corporation (NTPC)
Amarchand Mangaldas Delhi managing partner Shardul Shroff is leading for the Government in the NTPC disinvestment. He is assisted by senior associate Arti Joshi and principal associate Prashant Gupta. O'Melveny & Myers acted as the international lead counsel with Singapore partner David Makarechian spearheading its team.

The NTPC prospectus has already been filed with the Securities and Exchange Board of India (SEBI), so the power company qualified for a fast-track procedure that does not require SEBI review of the follow-on offer, said a source close to the transaction.

Rural Electrification Corporation (REC)
Finally, Luthra & Luthra is advising the Government in selling 5 per cent of its REC shareholding in the fresh issue of 15 per cent of equity, after the disinvestment received the nod on 29 October 2009.

Capital markets partner Madhurima Mukherjee advised the GOI as lead domestic counsel with senior associate Jitesh Shahni and associates Kaushik Laik and Raghvendra Singh.

The 2009 sell-offs so far
In the 2009 disinvestment stakes Amarchand has so far also racked up instructions in the NHPC (National Hydroelectric Power Corporation) initial public offering (IPO) with Dorsey & Whitney, as well as on the revival of the Oil India IPO alongside Luthra & Luthra and Ashurst in London. The mandates together filled Government coffers by Rs 8,600 crores

The Government of India unveiled its current policy of disinvestment on 5 November 2009 that made it mandatory for all listed profit making CPSUs to offer 10 per cent shareholdings to the public. Unlisted profitable units are to be listed either through public offerings of Government stakes and/or through the issue of fresh equity by the company.

This eligibility criterion has brought 60 state-owned companies under the disinvestment scheme, with an action plan to be drawn up by March.

The proceeds of disinvestment will be channeled into the National Investment Fund, which is set to invest in social sector projects to promote education, health care and employment.

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