Reuters reported that the government of India has planned to invite financial bids for the privatization of the Shipping Corporation of India Ltd next month. The PM Narendra Modi-led government had announced in 2023 plans to privatize several state-run companies, including selling its stake in Shipping Corporation of India Ltd, which was stopped due to regulatory delays.
Shipping Corporation of India Ltd (SCI) owns and operates bulk carriers and crude oil tankers. It had to give away the company’s non-core assets. This was before the government could sell its 63.75 per cent stake, which, in turn, proved to be a roadblock over the number of funds to be transferred to the demerged entity. SCI completed the spin-off last month. This was after getting the regulatory approval late in February. This demerged entity was SCI Land Assets Ltd and must be listed before April 2023. The govt plans to do that soon, one of the officials said.
The government plans to invite financial bids for the Shipping Corporation of India Ltd, which operates around one-third of the total tonnage of India. According to the two officials, the government plans to do this by mid-May. The officials didn’t want to be named as the plan was still not public. They said that a final decision shall be taken on April 14, 2023, by a panel headed by the cabinet secretary of India. One of the officials also said that the panel shall consider a proposal for inviting the initial bids to sell the government’s 31 per cent stake in Container Corporation of India Ltd, which was delayed since the year 2020.
Earlier Developments for Privatising Shipping Corporation of India
The Ministry of Corporate Affairs granted permission to split the core and non-core assets of the SCI in January 2023. This move will pave the way for the government to divest its 63% stake in the company.
The Economic Times reported that the move had hit a fresh challenge after about 40 objections were filed by different vendors and stakeholders ahead of its privatization.
The Shipping Corporation of India Officers Association and the Shipping Corporation of India Staff Union, in their submission to the corporate ministry earlier, sought to protect the interests of employees post-privatization.
The Ministry of Corporate Affairs called for a final meeting on the demerger in December last year. During the final hearing, the Ministry of Corporate Affairs directed the Shipping Corporation of India Ltd to file its response on how it shall propose to address the several concerns. But this direction threw the state-run company into a problem regarding who shall sign the affidavit.
The problem arose because the delegation of powers run in the state-run firms like Shipping Corporation of India Ltd does not mention instances like filing of affidavits and the officer signing them. Hence, the Board of the company or its chairperson shall have to authorize an officer to file the affidavit under his signature. The Mumbai-headquartered Shipping Corporation of India Ltd is a govt corporation under the ownership of the Ministry of Shipping. Shipping Corporation of India Ltd is tasked with the operations and management of vessel servicing.