Govt sells Central Electronics to Nandal Finance and Leasing for Rs 210 cr; sale to be completed by March 2022 – EQ Mag Pro
CEL, under the Ministry of Science and Technology, is a pioneer in the field of solar photovoltaic
New Delhi: The government on Monday approved sale of Central Electronics Ltd to Nandal Finance and Leasing for Rs 210 crore, marking the second strategic disinvestment of the current fiscal. Incorporated in 1974, CEL, under the Ministry of Science and Technology, is a pioneer in the field of Solar Photovoltaic (SPV) and has developed the technology with its own R&D efforts. It has also developed axle counter systems that are being used in railway signaling systems for safe running of trains.
The government had issued a request for Expressions of Interest (EOI) on February 3, 2020, following which three EoIs were received. However, only two companies — Nandal Finance and Leasing Pvt Ltd and JPM Industries Ltd — put in financial bids by October 12, 2021.
While Ghaziabad-based Nandal Finance and Leasing bid for Rs 210 crore, JPM Industries quoted Rs 190 crore.
“The Alternative Mechanism… has approved the highest price bid of M/s Nandal Finance and Leasing Pvt Ltd for sale of 100 per cent equity shareholding of GoI in Central Electronics Ltd (CEL) – a CPSE under the Department of Scientific and Industrial Research (DSIR). The winning bid is for Rs 210,00,60000,” an official statement said.
The Alternative Mechanism (AM) on strategic disinvestment of CEL comprised Road Transport Minister Nitin Gadkari, Finance Minister Nirmala Sitharaman and Minister of State for Science and Technology Jitendra Singh.
The next step will be to issue the Letter of Intent (LoI) and then sign the Share Purchase Agreement.
It is expected that the transaction will be completed during current FY 2021-22 (ending March 2022), the statement added. Based on the valuations by the transaction adviser and the asset valuer, the government had arrived at a reserve price of Rs 194 crore for CEL.
The higher of the two price bids, submitted by M/s Nandal Finance and Leasing Pvt Ltd, was found to be above the reserve price, the statement said. This is the second time that the government had initiated the process of strategic sale of CEL after the Cabinet on October 27, 2016, approved its disinvestment. In the first iteration, no financial bids were received. The sale process restarted in February 2020.
This is the second strategic disinvestment of the current fiscal. In October, the government decided to sell 100 per cent ownership of Air India and Air India Express along with its 50 per cent stake in ground-handling company AISATS to Tata Sons for Rs 15,300 crore — the first privatisation in 20 years. The Air India sale process is expected to be completed by December.