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The Government has invited Expression of Interest (EoI) from domestic and foreign players for strategic disinvestment in BEML Limited (formerly known as Bharat Earth Movers Limited).
The Government has ‘in-principle’ decided to disinvest 26 per cent of the equity share capital of BEML Limited through strategic disinvestment with the transfer of management control. At present, the Government holds 54.03 per cent in the company. EoIs can be submitted till March 1. Post completion of the evaluation of the bids received, the Transaction Advisor will directly intimate the Shortlisted Bidders (SBs) about their qualification for participation in Stage II and the next steps for the proposed transaction.
Open offer
Since BEML is a listed entity, acquisition of 26 per cent of stake by any investor(s) would trigger a mandatory open offer (obligation for open offer triggers at 25 per cent). According, the selected investor(s) will be required to make an offer to acquire an additional 26 per cent from the public shareholders the moment its shareholding in the company becomes 25 per cent or more.
In 2017, it was decided to separate the operational and non-operational land and hive off the non-operational/surplus land and buildings and keep surplus assets out of the scope of disinvestment. Accordingly, these assets will not form a part of the transaction. If the process of hive-off is not completed before the completion of the disinvestment process, then a suitable mechanism will be formulated to ensure that the non-operational surplus land does not form part of the total assets of the company post disinvestment
BEML is a Central Public Sector Undertaking under Defence Ministry operating three major business segments - Mining & Construction, Defence & Aerospace and Rail & Metro with ₹10,610 cr order book as on September 30, 2020. It has nine manufacturing units spread over four locations viz Bengaluru, Kolar, Mysuru and Palakkad. The company has over 6,200 employees. For the quarter ended September 30, the company’s total income was around ₹670 crore while net profit was over ₹18 crore.
The company’s share closed at ₹974.25 with a gain of 0.64 per cent on the last trading day, i.e., January 1.
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