CEL: Tech, managerial experience not relevant criteria for bidder selection: FinMin on CEL sale
In a written reply to the Lok Sabha, Minister of State for Finance Bhagwat Karad said some allegations have been received from a CEL employees’ association with regard to the strategic sale.
“Pending legal examination of some of these allegations, the IMG has decided to put the Letter of Intent (LOI) on hold. Accordingly, the LOI has not been issued yet,” Karad said.
To a question on whether the government has evaluated technological and managerial experience and competence of Nandal Finance & Leasing Pvt Ltd, Karad said as per due process open bids were invited in a transparent manner based on the Rs 50 crore networth criteria as outlined in the EoI document.
“The technological and managerial experience of the bidder are not among the relevant criteria. It is a part of the disinvestment policy of the government to not make sectoral experience a qualification criterion for bidders to expand the universe of bidders and provide them a level playing field.
“Further, investors with the right resources and entrepreneurship can enter into any business with the help of managers and employees of the company being disinvested as well as through additional hiring,” Karad added.
He further said that CEL is proposed to be disinvested on ‘a going concern’ basis, which means existing employees including experts/professionals will continue.
Incorporated in 1974, CEL is a pioneer in the field of solar photovoltaic (SPV) and it has developed the technology with its own R&D efforts. It has also developed axle counter systems that are being used in Railway signalling systems for the safe running of trains.
The government had issued a request for Expressions of Interest (EOI) on February 3, 2020, for CEL sale following which three preliminary bids were received. Later, two companies — Nandal Finance and Leasing Pvt Ltd and JPM Industries Ltd — put in financial bids by October 12, 2021.
While Nandal Finance and Leasing Pvt Ltd placed an offer of Rs 210 crore, JPM Industries Ltd bid for Rs 190 crore.
The bid by Nandal Finance was higher than the ‘Reserve Price’ of Rs 194 crore set by the government based on the valuations by the Transaction Adviser and the Asset Valuer.
To a query regarding the fixed assets owned by M/s Nandal Finance & Leasing, Karad said, “As per the documents verified by the Transaction Advisor, the successful bidder has a networth of about Rs 143 crore as on March 31, 2021 against the net-worth criteria of Rs 50 crore as per PIM (preliminary information memorandum) /EoI (Expression of Interest)”.
