Cabinet gives ‘In-Principle’ approval for KPL disinvestment

Cabinet gives ‘In-Principle’ approval for KPL disinvestment

Agency News

New Delhi, Feb 28 : Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi here on Thursday has given 'in principle' approval for strategic disinvestment of 100 per cent equity shares of Government of India in Kamarajar Port Limited (KPL).

As part of the disinvestment initiative, 100 per cent equity shares of KPL owned by government will be given to Chennai Port Trust (CPT) in a single stage process, by following ‘Arm’s length’ principles. It was stated that presently, the Central Government and Chennai Port Trust hold 67 per cent and 33 per cent of shares respectively in Kamarajar Port Limited.

The methods of valuation, to be used shall include discounted cash flow, assets valuation and relative valuation as recommended by NITI Aayog. This would help to avoid duplication of capacity creation in the ports. Better human resource management in between the two ports will increase the efficiency of both Ports.

The strategic disinvestment of KPL shall be undertaken after conducting due diligence exercise by both the entities with the help of Advisors to be appointed for the transaction.

The approval is in the backdrop that ChPT and KPL will be able to evolve a clear policy on focus areas by devising optimum business strategy and defining dedicated cargo profile. UNI