Department of Disinvestment, Ministry of Finance, Govt. of India |
17 May 2012 10:32:47 PM |
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MINISTRY
OF DISINVESTMENT
ENGAGEMENT
OF AN ADVISOR FOR DISINVESTMENT IN MECON LIMITED
The Government of India intends to
disinvest 51% of its shareholding in MECON LIMITED, a leading
design, engineering, consultancy and contracting organization to a
strategic buyer. Expressions
of Interest are invited by 29-11-2001 for engaging an Advisor to
assist the Government in this process.
For further details, interested parties may visit the
website: www.meconlimited.com
or www.divest.nic.in
or
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Government
of India
Ministry
of Disinvestment
Requires an Advisor for
Disinvestment of GOI Shareholdings in the MECON Ltd.
The Government of India (GOI) intends to disinvest 51% of its shareholding in MECON Limited through a strategic sale to a strategic buyer, and plans to engage the services of an Advisor to advise and manage the disinvestment process successfully.
MECON Limited formerly known as METALLURGICAL & ENGINEERING CONSULTANTS (INDIA) LIMITED was incorporated on 31st March,1973. MECON’s head office is located at Ranchi in Jharkhand and has a wide network of offices in India. It is a wholly owned company of Government of India. The paid up share capital of MECON is Rs. 2,41,83,600. The Company has wide experience and infrastructure for carrying out engineering, consultancy and project management services as well as turnkey execution for mega projects encompassing Iron & Steel, Non ferrous metals, Mining, Power Plant & Energy Engineering, Oil & Petrochemicals, Gas pipelines, Environment & Ocean engineering, architecture & town planning, civil works, structural works, electric, air conditioning & refrigeration, instrumentation, utilities, material handling & storage, information technology etc. The turnover of the company for the year 1999-200 was Rs. 2350.38 million and in year 2000-01 was Rs.2744.7 million (provisional).
The responsibilities of the Advisor would involve advising and assisting GOI in the disinvestments of MECON Limited and would, inter alia, cover assessment and valuation of MECON Limited, suggesting measures to enhance sale value, preparing a detailed information memorandum, marketing of the offer, inviting and evaluating the bids, assisting during the negotiations with prospective buyers, drawing up the sale/ other agreements and advising on post sale matters.
Submission of Expression of Interest
Reputed merchant/investment banks, consulting firms and financial institutions with expertise in privatisation/strategic sales are invited to submit Expression of Interest for selection as Advisor, singly or as a consortium, on or before 1700 hours on 29th November, 2001. The bidders would be required to deposit along with the Expression of Interest, a non-refundable earnest fee of INR 20,000 (or US$ 500) by way of demand draft drawn in favour of MECON Limited, payable at Ranchi. GOI reserves the sole right to accept or reject any or all expressions of Interest without assigning any reasons therefore.
The interested bidders may collect the prescribed proforma for the Expression of Interest from:
Director (Commercial)
MECON Limited
Doranda,
Ranchi (Jharkhand) – 834002, INDIA
Phone : 0651-502209
Fax : 0651-502214 / 502189
e-mail: cmd@mecon.nic.in
or download the proforma from www.meconlimited.com
PROFORMA FOR SUBMISSION OF EXPRESSION OF INTEREST FOR APPOINTMENT AS AN ADVISOR FOR THE DISINVESTMENT OF GOVERNMENT OF INDIA'S SHAREHOLDING IN MECON LIMITED
The interested bidders may submit their Expression of interest to act as the Advisor, singly or as a consortium, for Disinvestment of 51% out of 100% Government of India’s shareholding in MECON Limited positively by the 29th November, 2001 by 1700 hours (IST) with the following details :
1. Full particulars of the constitution, ownership and main business activities of the prospective Advisor (bidder). In case of consortium bids, the particulars of the coordinating firm having the principal responsibility for the mandate as well as those of other partners.
2. Unabridged Annual Reports or audited financial accounts for the last three years of all the partners.
3. Details of the pending litigation and contingent liabilities, if any, that could affect the performance of the bidder under the mandate, as also details of any past conviction and pending litigation against sponsors/partners and any areas of possible conflicts of interest.
4. Government of India has recently issued guidelines prescribing certain qualifications for Advisors for disinvestment process. A copy of the guidelines (OM No. 6/4/2001 – DDII dated 13th July 2001) is enclosed. You are requested to carefully go through the guidelines and after satisfying yourself that you are qualified to act as Advisor, furnish the following certificate as a part of the proposal.
“We certify that there has been no conviction by a Court of Law or indictment/adverse order by a regulatory authority for a grave offence against us or any of our sister concern. It is further certified that there is no investigation pending against us or our sister concern or the CEO, Directors/Managers/Employees or our concern or of our sister concern. It is certified that no conflict of interest exists as on date and in future if such a conflict of interest arises we will intimate the Government of the same.”
The above particulars should be provided year-wise (wherever applicable) for the last three years.
The shortlisted bidders would also be required to furnish three copies of documentation at the time of submission of Expression of Interest and ten copies of documentation at the time of making a presentation before an Inter-Ministerial Group(IMG), on the following criteria :
1. Presence in India, including number of offices, manpower, funds deployed, period etc. and the level of commitment in India.
2. Global experience
3. Privatisation experience
4. Details of similar transaction (Government, quasi Government and private sector, separately) executed/under execution by the bidder in a similar sector/industry. This should cover the role played by the bidder in deal structuring, valuation, transaction marketing, preparation of information and sale memorandum, shareholders agreement, etc. and bid evaluation and negotiations.
5. Experience in capital market transactions, (both equity and debt), in the Government, quasi Government and private sectors, separately, indicating the number of deals executed and quantum of funds raised.
6. Expertise, including research coverage and capabilities in consultancy, design & engineering and contracting organisations and an understanding of MECON Limited including a SWOT analysis incorporating key selling points and limitations.
7. Proposed methodologies of the Disinvestment /Strategic sale transaction indicating the issues involved including;
a. Valuation of MECON Limited
b. Transaction of structuring
c. Marketing Strategy
d. Bid evaluation methodology
e. Tentative time-frame
8. Details of deal team;
a. Experience and qualifications
b. Team members located abroad
c. Team members located in India
The presentation by the shortlisted bidders will take place before the IMG on 17th/18th December 2001 at New Delhi. Shortlisted bidders would be intimated the time and venue before the presentation date.
The bidders are required to submit at the time of presentation sealed financial bids incorporating the fee chargeable as a percentage of the sale proceeds from the disinvestment of the GOI stake in MECON Limited, gross of all taxes. The bid should be unconditional.
-
Expenditure on account of fees to legal/accounting or any other consultant, if appointed by GOI and/ or MECON Limited should not be included in the financial bid. The travel related expenses and all the other expenses including those related to due diligence would have to be borne by the Advisor.
The financial bid should also indicate a lump sum amount to be charged as drop dead fee, which would be payable if the GOI wants to call-off the transaction.
Interested bidders are required to deposit along with their Expression of Interest a non-refundable earnest fee of INR 20,000 (or US $ 500 for foreign bidders) by way of a Demand Draft payable at Ranchi in favour of MECON Limited. GOI reserves the sole right to reject any or all Expression of interest without assigning any reasons therefor.
Further clarification, if any, should be sought from, and the Expression of interest sent to, MECON Limited at the following address :
Director (Commercial)
MECON Limited
Doranda,
Ranchi (Jharkhand) – 834002, INDIA
Phone : 0651-502209
Fax : 0651-502214 / 502189
e-mail: cmd@mecon.nic.in
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No.
6/4/2001-DD-II Dated 13th July, 2001 OFFICE MEMORANDUM Subject: Guidelines for qualification of Advisors for disinvestment process
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Government
has examined the issue of framing comprehensive and transparent
guidelines defining the criteria for selection of Advisors, so that
the parties selected through competitive bidding inspire public
confidence. Earlier, a set of criteria like sector experience,
knowledge, commitment etc. used to be prescribed. Based on experience
and in consultation with concerned departments, Government has decided
to prescribe the following additional criteria for the qualification /
disqualification of the parties to act as Advisors to the Government
for the disinvestment transactions:- |
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| (a) |
Any
conviction by a Court of Law or indictment / adverse order by a
regulatory authority for a grave offence against the Advising concern
or its sister concern would constitute a disqualification. Grave
offence would be defined to be of such a nature that it outrages the
moral sense of the community. The decision in regard to the nature of
offence would be taken on a case to case basis after considering the
facts of the case and relevant legal principles by the Government.
Similarly, the decision in regard to the relationship between the
sister concerns would be taken, based on relevant facts and after
examining whether the two concerns are substantially controlled by the
same person/persons. |
| (b)
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In
case such a disqualification takes place, after the entity has already
been appointed as Advisor, the party would be under an obligation to
withdraw voluntarily from the disinvestment process, failing which the
Government would have the liberty to terminate the appointment /
contract. |
| (c) |
Disqualification
shall continue for a period that Government deems appropriate. |
| (d) |
Any
entity, which is disqualified from participating in the disinvestment
process, would not be allowed to remain associated with it or get
associated merely because it has preferred an appeal against the order
based on which it has been disqualified. The mere pendency of appeal
will have no effect on the disqualification. |
| (e) |
The
disqualification criteria would come into effect immediately and would
apply to all the Advisors already appointed by the Government for
various disinvestment transactions, which have not yet been completed.
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| (f) |
Before
disqualifying a concern, a Show Cause Notice why it should not be
disqualified would be issued to it and it would be given an
opportunity to explain its position. |
| (g) |
Henceforth,
these criteria will be prescribed in the advertisements seeking
Expressions of Interest (EOI) from the interested parties to act as
Advisor. Further, the interested parties shall be required to provide
with their EOI an undertaking to the effect that no investigation by a
regulatory authority is pending against them. In case any
investigation is pending against the concern or its sister concern or
against the CEO or any of its Directors/Managers/Employees, full
details of such investigation including the name of the investigating
agency, the charge/offence for which the investigation has been
launched, name and designation of persons against whom the
investigation has been launched and other relevant information should
be disclosed, to the satisfaction of the Government. For other
criteria also, similar undertaking will be obtained along with EOI.
They would also have to give an undertaking that if they are
disqualified as per the prescribed criteria, at any time before the
transaction is completed, they would be required to inform the
Government of the same and voluntarily withdraw from the assignment. |
| (h) |
The
interested parties would also be required to give an undertaking that
there exists no conflict of interest as on the date of their
appointment as Advisors in handling of the transaction and that, in
future, if such a conflict of interest arises, the Advisor would
immediately intimate the Government of the same. For disinvestment
proposes, 'conflict of interest' is defined to include engaging in any
activity or business by the Advisor in association with any third
Party, during the engagement, which would or may be reasonably
expected to, directly or indirectly, materially adversely affect the
interest of Government of India or the Company (being disinvested) in
relation to the transaction, and in respect of which the Advisor has
or may obtain any proprietary or confidential information during the
engagement, that, if known to any other client of the Advisor, could
be used in any manner by such client to the material disadvantage of
Government of India or the Company (being disinvested) in the
transaction. The conflict of interest would be deemed to have arisen
if any Advisor firm/concern, has any professional or commercial
relationship with any bidding firm / concern for the same
disinvestment transaction during the pendency of such transaction. In
this context, both Advisor firm and bidding firm would mean the
distinct and separate legal entities and would not include their
sister concern, group concern or affiliates etc. The professional or
commercial relationship is defined to include acting on behalf of the
bidder or undertaking any assignment for the bidder of any nature,
whether or not directly related to disinvestment transaction. |
| (i) |
On
receiving information on conflict of interest, the Government would
give the option to the Advisor to either eliminate the conflict of
interest within a stipulated time or withdraw from the transaction and
the Advisor would be required to act accordingly, failing which
Government would have the liberty to terminate the
appointment/contract. |
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