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Probe into disinvestment process
M&M buys stake in Punjab Tractors
Ajay Banerjee and Ruchika M. Khanna
Tribune News Service

Chandigarh, March 8
Even as the Punjab Government today decided to hold a vigilance inquiry into the disinvestment process of Punjab Tractors Limited, Mahindra and Mahindra clinched the deal for a 29 per cent stake of the company.

Highly placed sources informed The Tribune here tonight that Mahindra and Mahindra had made a bid of Rs 360 per share for acquiring the stake in the company, put on the block by financial investor, Actis.

Following the complete financial turnaround of the company in the past three years, some of the top players in the auto market were in the race to acquire a stake in the company. These included Ashok Leyland, John Deere, TAFE, Tata Motors in collaboration with New Holland Tractors and Sonalika Group.

The bids were opened today even as the Punjab Government said his government “would hold a vigilance inquiry into the disinvestment process of the company. It said in case some wrong in the process of disinvestment was established, the government would declare the sale as “illegal” and take back the management from the buyers.

The government initially held about 23 per cent stake in PTL. In 2003, the government had sold off this share to a single company, CDC (later Actis), which is a UK government entity. Actis had acquired the PTL shares at the rate of Rs 154 per share by investing Rs 218 crore in the company.

The government now says that the inquiry comes in the wake of allegations that the disinvestment was made on a single-bid basis and the process and procedure adopted was not lawful.

The government cautioned the new bidders and said anybody participating in the further acquisition would be doing so at his own risk and responsibility. Actis is expected to have made a profit of over Rs 300 crore after offloading its stake in PTL.

It may be noted that the other main financial investor in PTL, the investment branch of Dabur India, too, is proposing to sell off its 14. 5 per cent stake in the company. The value of the Dabur India promoted company’s shareholding is estimated at around Rs 250 crore (they had bought the shares at an estimated Rs 200 crore).

Sources said the market capitalisation of the company is around Rs 1,700 crore and with the steady increase in the value of shares, the new investors, too, would be happy at the decision taken by Dabur India to sell its stake.

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