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Govt invites bids for Hindustan Newsprint

Merchant banker SBI Capital Markets on Wednesday invited preliminary enquiries from bidders for a controlling stake in state-owned Hindustan Newsprint Ltd.

The government plans to sell either 74 per cent or 100 per cent holding in the company, a wholly-owned subsidiary of the government-run Hindustan Paper Corporation. It operates a 100,000 tonnes newsprint plant in Kerala.

According to newspaper advertisements, Indian and foreign companies which have a net worth in excess of Rs 1.5 billion are required to put in "expressions of interest" applications by February 28.

The bidders are also required to have five years' experience in any manufacturing activity or three years in the manufacture of paper or related businesses. The expressions of interest is a preliminary process to help short-list potential bidders, who will be provided further details for due diligence exercise and then invited to make financial bids.

Hindustan Newsprint reported a net profit of Rs 161.99 million in the year to March 2001 on sales of 2.67 billion. Its net worth was Rs 2.17 billion as on March 31, 2001.

India's ambitious privatisation programme which began in 1991 has not met with much success with the government failing to meet divestment targets year after year.

In the current year to March, the government has set itself a target of raising Rs 120 billion.

Last October, the government sold controlling stakes in software and computer maintenance firm CMC Ltd and telecoms gear maker Hindustan Teleprinters for Rs 2.07 billion.

It is now close to wrapping up the privatisation of telecoms giant VSNL and oil marketing firm IBP Ltd.

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