CONCOR Appoints Advisors For Stake Sell

The government-owned Container Corporation of India (CONCOR) has announced the appointment of three advisors to conclude the 31% stake sell in the logistic arm of Indian Railways.

L&L Partners will advise on legal issues, Deloitte Touche Tohmatsu India being transaction advisors and RBSA Valuations Advisors LLP as asset values.

CONCOR moves a step closer towards the proposed divestment of government stake in the firm in accordance with the bid process kick-started last month.

The Request for Proposal or RFP was issued for partial disinvestment of the government of India’s equity shareholding in Concor from 54.8% to 30.8% along with transfer of management control to a strategic buyer.

CONCOR share price gained about 20% from their lows in August, even as its business hit a soft patch in recent quarters.

Investors are optimistic about the prospect of an ownership change.

The largest container train operator in India has been drawing enough interest from potential investors.

Adani Ports and Special Economic Zone Ltd recently told analysts that it will consider buying the government’s stake in CONCOR, even though it is cheaper to build the business from scratch.

But building facilities of such a scale would take 15-20 years.

So it makes strategic sense to acquire the company, goes the logic.

CONCOR controls around 70% market share and selling a strategic stake with management control will create a virtual monopoly for the buyer

The Department of Investment and Public Asset Management (DIPAM) has a target of Rs 1.05 lakh crore of divestment proceeds by March 31. SO far, during the current financial year 2019-20 so far Rs 17,364.26 crore has been obtained through disinvestment transactions

Pacing up the disinvestment calendar to meet a daunting target by March 31, DIPAM on Friday issued 15 requests for proposals, including those for strategic disinvestment of BPCL, and also for partial divestment of government’s equity in railways’ arm CONCOR.

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