Central Electronics disinvestment; Govt approved 100% stake sale

New Delhi: The Centre on Monday, November 29, gave the green flag for fully disinvestment of stake in a state-owned engineering company Central Electronics Ltd (CEL).

Nandal Finance and Leasing Pvt Ltd is the one who bids the highest for the CEL of Rs 210 crore. The official statement released by govt mentioned, "The Alternative Mechanism has approved the highest price bid of M/s Nandal Finance and Leasing Pvt Ltd for sale of 100% equity shareholding of GoI in Central Electronics Ltd (CEL) - a CPSE under the Department of Scientific and Industrial Research (DSIR). The winning bid is for Rs 210,00,60000"

The decision was undertaken by the Cabinet Committee on Economic Affairs (CCEA) empowered Alternative Mechanism (AM) comprising Shri Nitin Jairam Gadkari, Union Minister of Road Transport and Highways; Smt. Nirmala Sitharaman, Union Minister for Finance & Corporate Affairs; and Shri Jitendra Singh, Union Minister of State (Independent charge) Ministry of Science and Technology, has approved the highest price bid of M/s Nandal Finance and Leasing Pvt Ltd for sale of 100% equity shareholding of GoI in Central Electronics Ltd (CEL)- a CPSE under the Department of Scientific and Industrial Research (DSIR). The winning bid is for Rs 210,00,60000/- (Rupees two hundred ten crore sixty thousand only).

CEL's disinvestment process begins in October 27, 2016, with the ‘in-principle’ approval of CCEA. In the first iteration, due process was followed for strategic sale of CEL, and the final SPA, along with the 'Request for Proposal' document were shared with the Qualified Institutional Buyers (QIBs) on 02.05.2019, inviting financial bid by 20.06.2019.  However, no financial bids were received.

These two companies bids for Central Electronics Limited:

(i) M/s Nandal Finance and Leasing Pvt Ltd for a price bid of Rs 210,00,60,000/- (Rs two hundred ten crore sixty thousand only)

(ii) M/s JPM Industries Ltd. for a price bid of Rs 190,00,00,000/- (Rs one hundred ninety crore only).

The higher of the two price bids price bid submitted by M/s Nandal Finance and Leasing Pvt Ltd was found to be above the reserve price.

The entire disinvestment process has been carried out in a transparent manner, with due regard to confidentiality of the bidders, through multi-layered decision making involving Inter-Ministerial Group (IMG), Core Group of Secretaries on Disinvestment (CDG), and the empowered Alternative Mechanism (AM) at the apex Ministerial level. Transaction Adviser, Legal Adviser, Asset Valuer as professionals in their respective fields, have supported the entire process.

The next step will be to issue the Letter of Intent (LoI) and then sign the Share Purchase Agreement following which, the conditions precedent would need to be satisfied by the successful bidder, the company, and the Government. It is expected that the transaction will be completed during current FY 2021-22.