(RTTNews) - The Indian government said it was planing to dilute its holding in steel major Steel Authority of Indian Ltd., or SAIL, up to 20% in two tranches. While the company will make a fresh issue of shares up to 10% of its paid-up capital, the government will divest 10% of its stake, say media reports.

The amount will be utilized to part finance the company's Rs.70,000-crore expansion projects.

Steel Minister Virbhadra Singh said the disinvestment would be carried out in two tranches of 10% each, and would be a mix of diluting government stake was well as issuance of fresh shares.
The minister further stated that a proposal for raising additional equity by SAIL up to 10% of the paid-up capital and disinvestment of up to 10% of the paid-up capital of the government of India's holding in SAIL in two equal tranches is under consideration of the government.

Presently, the government holds 85.83% stake in the company's paid-up capital of Rs.4,130 crore. The company will now issue 45.88 core fresh shares in two tranches, enabling it to raise over Rs.8,500 crore at the current prices. The government will also raise similar amount by selling 10% equity.

The sale of the first tranche is expected to be completed during this fiscal itself. The sale of second tranche will also be completed within a few months of completion of the first tranche, as the company required finds soon, sources added.

by RTT Staff Writer

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