The department of investment and public asset management (DIPAM) Tuesday issued preliminary information memorandum and expression of interest for strategic disinvestment of its full equity in Projects & Development India Limited (PDIL) and HLL Lifecare Limited (HLL).
Strategic divestment indicates that the government will sell off its entire holding in the public sector enterprises and will also cede management control to the new buyers. Both companies are fully owned by the government.
In the preliminary information memorandum issued for HLL, the government has set a deadline of January 31, 2022 for submission of EoIs. Qualifying bidders will be intimated by February 14, 2022. In the PIM issued for PDIL, the government has set a last date of January 31, 2022 for parties to submit their bids.
HLL
The government, which has appointed PwC as the transaction advisor for the proposed transaction, will sell HLL in its entirety.
“The GoI envisages the strategic disinvestment of HLL as a whole rather than separately in parts, where Interested Bidders can bid individually or in consortium,” the government said in the information memorandum.
HLL’s wholly owned subsidaries HITES and HMCCHL, 74% owned subsidiary GAPL and joint venture company LHPL, will be included in the sale.
“On completion of the transaction as well as the stipulated lock-in period, flexibility would be given to the strategic acquirer for an easy exit from a part of business which is not in sync with the business plans of the acquirer,” the government said.
It added that the condition of lock-in period of entire shareholding in the company, requirements regarding lock-in of equity, continuity of business, staff service conditions, et all will be clarified at time of issuing the request for proposal or the second stage of the bid process.
As of 31st March, 2021, HLL’s authorised capital was ₹300 crore and its paid-up share capital was ₹15.53 crore.
HLL is a miniratna enterprise under the administrative control of the ministry of health and family welfare. HLL is involved in manufacturing and marketing of a range of contraceptives, including India’s second largest condom brand Moods, besides women’s healthcare products, hospital supplies as well as other pharmaceutical products.
HLL has a diverse portfolio covering almost the entire healthcare spectrum including product areas such as healthcare equipment and devices as well as services such as affordable diagnostics, hospitals, and niche services such as healthcare project and procurement consulting. HLL caters to both domestic and international markets.
PDIL
The government has barred central public sector undertakings (CPSEs) and central government-owned cooperative societies where government ownership is 51% or more from participating in the transaction.
EOIs by management or employees of PDIL directly or independently or in a consortium or joint venture or as a special purpose vehicle along with a bank, venture capitalist or a financial institution will be considered in accordance with the guidelines issued by DIPAM, the government said.
Bidders should have a minimum net worth of ₹150 crore as on March 31, 2021. “The selected IP shall be required to lock-in its entire shareholding in the Company. The period of lock-in will be subsequently shared with the shortlisted IPs in the RFP,” the government added.
The government has clarified that it will indemnify the liabilities pertaining to the catalyst plant in Sindri, in order to make the proposed transaction more attractive.
“As on date of EOI, there are liabilities outstanding, along with warranties pertaining to the catalyst plant that PDIL may have to bear in future. In this regard, it is clarified that GoI/DoF (department of fertilisers) will indemnify the liabilities – whether contingent or otherwise – pertaining to the division of the catalyst plant in Sindri such liabilities are actually crystallised against PDIL, after completion of the transaction,” the government said in the memorandum.
PDIL had two divisions of environmental engineering and a catalyst plant in Sindri. The environmental engineering unit was relocated to Noida and all assets and infrastructure was handed over to Fertilizer Corporation of India Limited in 2017.
PDIL is a miniratna public sector undertaking under the control of the ministry of chemicals and fertilizers, engaged in providing engineering and consultancy services in design, engineering and related project execution services from concept to commissioning of various projects.