Rashtriya Chemicals staff bid for govt's stake

MUMBAI: The employees and management of Rashtriya Chemicals and Fertilizers (RCF) have bid for 51 per cent of the company''s equity that the government has put up for sale.
The Tata group and Reliance are the other major contenders. The bidding process closed on Tuesday and the short-listed bidders will now have to demonstrate their credentials to the inter-ministerial group (IMG) on disinvestment.
The employee-management team at RCF has incorporated a public limited company called Ujwal Fertilizers, through which a letter of intent (LoI) has been submitted to ICICI Securities, the advisors to the disinvestment process.
Ujwal Fertilizers has secured a letter of credit for Rs 300 crore from Bank of Maharashtra, sources close to the bidding process told Times News Network.
The bid document requires the bidder to have a net worth of at least Rs 300 crore.
The RCF employees have appointed SBI Caps as the advisors as well as the lead arrangers for funding their bid, which has the support of 570 employees, the sources said.
As per a government notification dated April 25, 2003, a bid by the employees or management for a PSU being divested will be preferred if it is within a 10 per cent range of the highest bid.
The employees of RCF are in talks with several other banks like Bank of Baroda, Bank of India and ABN Amro to fund the acquisition of 51 per cent of the government''s 92.5 per cent stake in the fertiliser and chemicals company.
The employee-management team has assured the banks that the management of the company would remain largely unaltered if they were to win the bid.
"The reason for the employees and management jumping into the fray was largely to protect the interests of the 4,500-strong employees of the public sector undertaking. Besides, the company has huge property assets in Mumbai and Thal, which the employees fear could be stripped by an outside party," the sources said.
RCF has a turnover of Rs 2,200 crore and its assets are valued at around Rs 1,000 crore. The company reported a gross profit of Rs 75 crore for the first half of 2003-04.