Department of Disinvestment, Ministry of Finance, Govt. of India

21 May 2012 7:56:39 AM


GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT


 


 

 

 

          PRELIMINARY INFORMATION MEMORANDUM (PIM)  

     OF  

                BHARAT WAGON & ENGINEERING COMPANY LIMITED  

 

TABLE OF CONTENTS

DISCLAIMER
Part-I SUBMISSION OF EXPRESSION OF INTEREST
Part-II BRIEF PROFILE OF BWEL
ANNEXURE I
ANNEXURE II
ANNEXURE III
ANNEXURE IV
ANNEXURE V
 



GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT


 


DISCLAIMER

 

1.      This Preliminary Information Memorandum (“PIM” or "Memorandum") has been prepared by Ernst & Young Private Limited (hereinafter referred to as “Ernst & Young” or “E&Y” which would be deemed to include its successors and assigns) based on information and opinions provided by the Management of Bharat Wagon & Engineering Company Limited (“BWEL”’ or “the Company”)  and Bharat Bhari Udyog Nigam Limited (“BBUNL” or “the Clients”), which is the holding company for BWEL.

 

2.      The Memorandum is being made available to you or your financial adviser for your exclusive use and for the sole purpose of assisting you in deciding whether you wish to participate in the proposed disinvestment in the Company. The information and opinions contained in the Memorandum are strictly confidential. Accordingly, the contents of the Memorandum and any other information or opinions subsequently supplied or given to you will constitute confidential Information and must not, without the written consent of BBUNL, BWEL or Ernst & Young, fully or partly be published, reproduced, copied or disclosed, to any person other than your financial advisers having a need to know and who are aware that it is confidential, nor used for any purpose other than the proposed disinvestment in the Company. You shall be responsible for any losses accruing to the Company/BBUNL consequent to any unauthorized disclosure.

 

3.      By receiving the Memorandum, you agree that you will on request, return or procure the return of this Memorandum and all other information and material sent or made available in connection with the proposed disinvestment of the Company, without retaining any copy in whatever form and shall destroy any notes, analyses or memoranda or other stored information, even partial, of any kind prepared by you or on your behalf to the extent that they contain or are based on such information.

 

4.      The Memorandum does not purport to be all-inclusive or necessarily to contain all the information the interested party may desire in investigating the Company and may be subject to updating, revision or amendment. The Memorandum is not intended to form the basis of any financial, legal, tax and process investment decision for you. Any interested party should carry out their own investigations and analysis of the Company and of the data referred to in the Memorandum and should consult their own advisers before proceeding with any offer.

 

5.      The information contained in the Memorandum will not constitute or form part of any offer for sale of shares in the Company nor will any such information form the basis of any contract in respect thereof. Any purchaser must rely on the terms and conditions contained in such a contract subject to such limitations and restrictions as may be specified therein.

 

6.      The Clients and/or the management of the Company have provided all information and opinions contained in the Memorandum and the Memorandum has not been independently verified as to its accuracy. No representation or warranty, express or implied, is given by BBUNL, the Company or Ernst & Young or any of their respective directors, partners, officers, affiliates, employees, advisers or agents as to the accuracy, relevance or completeness of the contents of this Memorandum or any other document or information supplied, or which may be supplied at any time or any opinions or projections expressed herein or therein, nor is any such party under any obligation to update the Memorandum or correct any inaccuracies or omissions in it which may exist or become apparent. In particular, for reasons of commercial sensitivity, information on certain matters has not been included in the Memorandum. Such information may be made available at a later stage.

 

7.      No responsibility or liability is accepted and any and all responsibility and liability is expressly disclaimed by Ernst & Young, BBUNL and the Company or any of them or any of their respective directors, partners, officers, affiliates, employees, advisers or agents for any errors, mis-statements, misrepresentations in or omissions from the Memorandum or any other document or information, howsoever communicated to you or your advisers in the course of your evaluation of the Company.

 

8.      Ernst & Young is acting as adviser to BBUNL and the Government of India  (GOI) only and to no other person in connection with the proposed disinvestment in  the Company. Neither receipt of the Memorandum nor any information supplied in connection with the proposed disinvestment in the Company by any person is or is to be taken as constituting the giving of investment advice or to constitute any person as a client of Ernst & Young in connection with the proposed disinvestment. This Memorandum should not be considered as a recommendation by Ernst & Young or the Company or any of its subsidiaries or affiliates or their respective directors, partners, officers, affiliates, employees, agents or advisers to acquire or invest in the Company and each potential party must make its own independent assessment of the merits or otherwise of acquiring the issued share capital of the Company and should take its own professional advice.

 

9.      Neither the issue of this Memorandum nor any part of its contents is to be taken as any form of commitment on the part of Ernst & Young or the Company or BBUNL or any of its subsidiaries or affiliates to proceed with the disinvestment exercise envisaged by the issue of this Memorandum and Ernst & Young and BBUNL/Government of India reserve the right to amend the proposed timetable and/or the disinvestment procedure, to terminate the procedure and to terminate any discussions and negotiations with any prospective party at any time and without giving any reason. In no circumstances will Ernst & Young or BBUNL/Government of India or any of its subsidiaries or affiliates, be responsible for any costs or expenses incurred in connection with any appraisal or investigation of the Company or for any other costs or expenses incurred by prospective party in connection with the proposed disinvestment in the Company. Any proposal to  invest in/acquire the Company made in due course must be made in accordance with the procedure set out in the Memorandum as amended by the Company and communicated via Ernst & Young, if appropriate.

 

10.  Should this Memorandum (through the act or default of the recipient) reach other persons without our written consent, the recipient will indemnify Ernst & Young and each company in the Ernst & Young Group against any loss or damage or other liabilities (including all costs), which they may suffer as a result. In providing this Memorandum, BBUNL/Government of India, the Company and E&Y undertake no obligation to invite the recipient to proceed with a further investigation of the Company nor to provide the recipient with any additional information, nor otherwise to negotiate with or treat with the recipient in respect of those companies




GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT


 

 

 

PRELIMINARY INFORMATION MEMORANDUM (PIM)

OF

BHARAT WAGON & ENGINEERING COMPANY LIMITED  

 

PART I

 

SUBMISSION OF EXPRESSION OF INTEREST

  1.         INTRODUCTION

 

1.1              Bharat Wagon & Engineering Company Limited (“BWEL” or “the Company”) is a 100% subsidiary of Bharat Bhari Udyog Nigam Ltd.(BBUNL) is a Government Company under the administrative jurisdiction of the Department of Heavy Industry, Ministry of Heavy Industry and Public Enterprises, Government of India.

 

1.2              BWEL is one of the largest Wagon manufacturers in India with an installed capacity of 2500 Four Wheeler Units (FWU). It has infrastructure for the manufacture of Tank/Special Wagons.  Two of its manufacturing units are  located at Mokamah & Muzaffarpur and their third manufacturing unit at Bela. Its registered office are located at Patna in the state of Bihar.

 

1.3              BWEL was incorporated in 1978, by an Act of Parliament, through the nationalization and subsequent amalgamation of two erstwhile companies, Arthur Butler & Co. located at Muzaffarpur and Britannia Engineering Works located at Mokamah. The decision of the Government was driven by the industrial sickness in both the companies, which had forced the Government to take over their management. Subsequently, in 1983 a third unit was added at Industrial Estate (Bela) Muzaffarpur for manufacturing LPG cylinders. In 1986, BWEL was made a wholly owned subsidiary of Bharat Bhari Udyog Nigam (BBUNL) which is the holding company for 9 nationalised companies in the heavy engineering sector and comes under the auspices of the    Ministry of Heavy Industries.  

BWEL is headquartered at Patna and has two regional offices in Delhi and Kolkata. The company has three manufacturing units at Mokamah, Bela and Muzaffarpur. The company is primarily engaged in the manufacturing of Railway Wagons. As a diversification measure the company has also entered into Steel Structures, Bridge Fabrications, Oil Tanks, Sugar Mill Equipment, Canal Gates and other Misc. Project Equipment.  

1.4      The Units at Mokamah and Muzaffarpur have received the ISO-9002 certification for wagon manufacturing. The company has achieved a number of distinctions in the area of productivity including the Indira Gandhi Memorial Award for productivity in 1988, Rajiv Gandhi Memorial National award for productivity in 1990 and the National Productivity Council Certificate of Merit in 1993.

1.5              BWEL  diversified into turnkey projects in 1979 as part of its diversification strategy and a separate Project Division was set up in 1995. This division has successfully executed a number of turnkey projects.  

1.6              The company became a wholly owned subsidiary of BBUNL upon its formation in September 1986. The company was declared as a Sick Industrial Company under the provision of the Sick Industrial Companies (Spl. Provisions) Act, 1985 and was referred to BIFR in 18.12.2000.  

 

1.7              As a part of its disinvestment programme, BBUNL intends to disinvest 74% equity in BWEL to a Strategic Partner along with transfer of management control.

 

1.8              Ernst & Young (“EYPL” or the Advisor), has been retained as Advisor to BBUNL for the proposed disinvestment process and matters relating thereto.

 

 

2.         ADVERTISEMENT INVITING EOI  

2.1              An advertisement has been issued in Newspapers on 20th January, 2003 inviting interested parties to submit their ‘Expression of Interest’ (EoI) to participate in the disinvestment process, a copy of which is enclosed as Annexure I .  

2.2              The above advertisement is without prejudice to the rights of BBUNL and the Government of India to retain as QIP(s) the interested party(ies) who had submitted their Expression(s) of Interest in response to the earlier announcement in this regard.

 

3.                  EXPRESSION OF INTEREST

 

3.1              This section describes the outlines of participating in the disinvestment process and the requirements relating to information to be provided by interested parties, when submitting their Expression of Interest (EOI).

 

4.         ELIGIBILITY / PRE QUALIFICATION CRITERIA

 

4.1              The interested party(ies) must have ;

 

(i)                  Positive Net Worth

(ii)                Annual turnover of Rs. 200 million and above as per the latest audited accounts.

 

4.2              For a consortium bid, all members of the consortium should meet the above mentioned eligibility criteria as per Section 4.1(i) and the latest combined audited turnover of the constituent entities of the consortium should meet the above mentioned eligibility criteria as per Section 4.1(ii), out of which the leader of the consortium should have at least 51% of the turnover as described in Section 4.1 above.

 

4.3              Where the financial statement is expressed in currency other than Indian Rupee, the eligible amount as described above shall be computed by taking the equivalent US dollars at the exchange rates (as stipulated by Foreign Exchange Dealers Association of India) prevailing on the date(s) of such financial statement.

 

4.4              Government is considering formulation of a policy for management buy-outs. This also would be applicable, as and when announced, to any EoIs received in response to this advertisement for management buy-out. It may, however, be clarified that the process of disinvestment would not be delayed in case the policy announcement in this regard is delayed.

 

4.5              Definition of Net Worth :

 

Net Worth will be assumed as per definition u/s. 3(1)(ga) of The Sick Industrial Companies (Special Provision) Act, 1985, as amended till date.

 

4.6              The PIM along with its enclosures does not constitute a commitment on the part of the GOI or BBUNL or Advisor, whether in respect of the disinvestment process or otherwise. Furthermore, the invitation confers neither any right nor expectation to any party to participate in the said process.

 

4.7              The GOI and BBUNL reserve the right to withdraw from the process or any part thereof, to accept or reject any or all offers at any stage of the process and/or modify the process or any part thereof or to vary any terms at any time without assigning any reason whatsoever. No financial obligation whatsoever shall accrue to the GOI or BBUNL or the Advisor in such an event.

 

5.       INITIAL PROCESS

 

5.1              Following receipt of this PIM, Interested Parties will be required to submit an EoI Package comprising an Expression of Interest, a Statement of Legal Capacity and a Request for Qualification (RFQ) in the format specified in Annexure II, III and IV.

 

5.2              Based on an evaluation of the EoI Package received, Interested Parties which are deemed fit (“Qualified Interested Parties” or “QIPs”) will be allowed to participate in the subsequent selection process (without conferring any right or expectation whatsoever to the QIPs).

 

5.3              Following signing of a Confidentiality Agreement (“CA”) by duly authorized personnel, QIPs will be provided with the Confidential Information Memorandum (“CIM”) and invited to participate further in the process as detailed in the CIM.

 

6.                  FILING REQUIREMENTS

 

6.1              Interested parties must submit, in duplicate, their EoI accompanied by a Statement of Legal Capacity and Request for Qualification (“RFQ”) the {“EoI Package”}, as per the formats given in Annexure II, III & IV of this PIM.  

6.2              EoIs must be duly signed by the authorised representative of the interested party(ies) / designated lead bidder of the consortium. However, the RFQ and the Statement of Legal Capacity will have to be submitted by each member of the consortium, duly signed by an authorised official of the member.

 

6.3              All EoI Packages must be in English and each copy shall be bound in a separate volume.  Submission of the aforesaid documents by fax, e-mail or other electronic means will not be acceptable.  It is the responsibility of the interested party(ies) alone to ensure that its EoI with required documents is delivered at the address given below by the stated time and date.  The covering envelope containing the aforesaid document should be clearly marked “Private and Confidential - Expression of Interest for participation in disinvestment in BWEL”. Neither BBUNL nor the Advisor shall be responsible for non-receipt of correspondence.

 

6.4                 The EoI Package must be submitted by no later than 17.30 hours (Indian Standard Time), 10th February,  2003 at the following address:

       
 

q       Debashish Ghoshal

 

Vice President, Corporate Advisory Services

Ernst & Young Pvt. Ltd.

22, Camac Street (3rd Floor)

Kolkata: 700016

West Bengal, India  

Phone: 033-22811224 

Email: Debashish.Ghoshal@in.eyi.com

               
 		  

q       Jayesh Desai

 

Director, Corporate Advisory Services

Ernst & Young Pvt. Ltd.

Ernst & Young Tower,

B-26 Qutab Institutional Area

New Delhi: 110016

Phone: 011-26611004

Email: Jayesh.Desai@in.eyi.com

               

               

 
 
 

 

 

 

 

 

 

 

 


 

 

 

 

7.       EOI FILED BY CONSORTIA/JOINT VENTURES

 

7.1              If a Consortium or Joint Venture is formed, or proposed to be formed, specifically for the purpose of this investment, details of the members of the Consortium or Joint Venture and the extent of their interest herein must be provided in the EoI Package.

 

7.2              Any subsequent change by way of withdrawal/substitution of any member of the consortium or joint venture or any change affecting the composition of the consortium or joint venture may be permitted, but only with the specific approval of the GoI.  The GoI or BBUNL or the Advisor have the sole discretion to determine the impact of the change in membership on the structure and quality of the Consortium or joint venture and reject a proposal without assigning any reason whatsoever.

 

The RFQ should be duly filled in and accompanied by the following details:

 

Ø      In case of a sole bidder

·         The Audited Balance Sheet and Profit & Loss Account of the sole bidder (Indian company/OCB/Foreign company) for the last 3 financial years.

 

·         Write-up on :

a)     Profile of the sole bidder

b)     A statement of reasons for strategic interest in BWEL

c)     Any other information considered material

 

Ø      In case of a consortium bid

·         The Audited Balance Sheet and Profit & Loss Account for the last 3 financial years of the lead bidder and other member companies associated in the bid.

·         Write-up on :

¨       Lead bidder

a)     Profile of the lead bidder

b)     A statement of reasons for strategic interest in BWEL

c)     Any other information considered material by the lead bidder

¨       Other member companies

a)     Profile of member companies in the consortium

b)     Any other information considered material by the lead bidder

 

8.         DISQUALIFICATIONS

 

8.1              The GOI/BBUNL/Advisor shall not consider for the purpose of qualification, an EOI which has been found to be incomplete in content or attachment or authenticity.

 

8.2              Without prejudice to any other rights or remedies available to the GOI/BBUNL/Advisor, a company/consortium/association of employees may be disqualified and its EOI dropped from further considerations for any of the reasons listed below:

 

ü      Material misrepresentation by such company/member of consortium/ association of employees in the EOI and/or RFQ or otherwise.

 

ü      Failure by such company/consortium/association to provide the information required to be provided in the EOI and RFQ, and

 

ü      Submission of EOI and RFQ in respect of any company/consortium/ association, where such company or member had already submitted an EOI or is a member of a consortium, which has already submitted an EOI and the earlier EOI has not been withdrawn.

 

8.3              If any information becomes known after the interested party has been qualified to receive the Confidential Information Memorandum(CIM), which would have entitled the GOI/BBUNL/Advisor to reject or disqualify the relevant company/consortium, the GOI/BBUNL/ Advisor reserves the right to reject the interested party at the time or at any time after such information becomes known to the GOI/BBUNL/ Advisor.

 

8.4              Further, Government of India have issued guidelines for disqualification of bidders seeking to acquire any public sector enterprises through the process of disinvestment vide Department of Disinvestment OM No. No. 6/4/2001-DD-II
dated 13th  July  2001, a copy of which is enclosed as Annexure V. The interested entities should not have been convicted by a Court of Law or indicted/have any adverse order passed against them by any Court of Law, or any other regulatory authority in any matter involving a grave offence and / or which casts a doubt on their ability to manage BWEL. Further such persons or companies, entities and / or their sister concern(s) should not have any chargesheets against them by any agency of the GOI or any Court of Law, which involves the matter concerning the security and integrity of India. The final decision in this regard would be taken by the GOI. The GOI, vide its circular F.NO.4/95/2000-DD (Vol. V), has clarified which offence can be treated as a “grave offence” as under:

 

a)     Only those orders of SEBI are to be treated as coming under the category of “grave offences” which directly relate to “fraud” as defined in the SEBI Act and/or regulations.

 

b)     Only those orders of SEBI that cast a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, are to be treated as adverse.

 

c)     Any conviction by Court of Law.

 

d)     In cases in which SEBI also passes a prosecution order, disqualification of the bidder.

 

The interested party(ies) are required to read the guidelines and satisfy themselves that they are qualified to bid for the stake in BWEL through the process of disinvestment and give an undertaking to the effect that they are qualified to bid for the stake in BWEL in the EOI to be submitted by them. Further, interested parties would be required to provide the information on the criteria, laid down in the guidelines of 13.07.2001 along with their EOI. The bidders 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 its CEO or any of its Directors/Managers/employees/members, 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, regarding the matters concerning the security and integrity of India, a similar undertaking shall be provided along with EOI.

 

8.5              Where the interested party is a consortium/association, BBUNL may disqualify the entire consortium/association for any of the reasons specified in paragraph numbers 8.1, 8.2, 8.3, and 8.4, even if it is applied to only one member of the consortium/ association.

 

8.6              The companies/consortia/associations not satisfying the eligibility and requisite qualification criteria specified in the above sections are not eligible.

 

9.         FUTURE PROCESS

9.1              The EOI submitted by interested parties shall be evaluated on the basis of the criteria specified elsewhere in this document. If at any time, during the evaluation process, BBUNL/Advisor require any clarification, it reserves the right to request for such information from any or all of the companies/consortia/associations and the companies/consortia/associations will be obliged to provide the same within reasonable time frame.

 

9.2              Based on an evaluation of EOIs received, interested parties, which are deemed fit (“qualified interested parties” “QIP”), will be qualified to participate in the subsequent selection process (without conferring any right or expectation whatsoever to QIP). QIP will be provided with the Confidential Information Memorandum (CIM) and shall be invited to participate further in the process described in details in the CIM. QIP will get an opportunity to conduct due diligence and take up site visits and will also have access to data rooms and to hold discussions with the management of BWEL/BBUNL/officials of Ministry of Heavy Industry and Public Enterprises/ Ministry of Disinvestment, Government of India. The rules regarding access to information in the data rooms will be provided to QIPs later. QIPs will be invited to submit their proposal and a binding price bid.

 

9.3              This document constitutes no form of commitment on the part of the GOI or BBUNL or the Advisor other than to provide further information on BWEL.  Furthermore, this document confers neither the right nor an expectation on any party to participate in the proposed divestment process.  The GOI/BBUNL/Advisor reserve the right to withdraw from the process or any part thereof or vary any terms at any time without assigning any reasons.  The GOI /BBUNL reserves the right to accept or reject any/all offer(s) without assigning any reasons.  

9.4              The GOI may consider financial restructuring of BWEL at a later date if considered necessary.

10.       ENQUIRIES

 

10.1          The GOI/BBUNL/Advisor reserve the right not to respond to question raised or provide clarifications sought, in their sole discretion, if it is considered that it would be inappropriate to do so. Nothing in this document shall be taken or read as compelling or requiring the GOI/BBUNL/Advisor to respond to any question or to provide any clarification. No extension of any time and date referred to in this PIM shall be granted on the basis or grounds that the GOI/BBUNL/Advisor has not responded to any question / provided any clarification.

 

11.       GOVERNING LAWS / JURISDICTION

 

11.1          The laws of Union of India shall govern all matters relating to the joint venture formation process and the bidding procedure. Only Courts at Bihar (with exclusion of all other Courts) shall have the jurisdiction to decide or adjudicate on any matter, which may arise out of or in connection with the joint venture participation.

 

GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT


 


PART II

 

BRIEF PROFILE OF Bharat Wagon & Engineering Co. Limited (BWEL)

 

1.         INTRODUCTION

 

1.1              Bharat Wagon & Engineering Co. Limited (“BWEL” or “the Company”) is a Government company under the administrative jurisdiction of the Department of Heavy Industry, Ministry of Heavy Industry and Public Enterprises, Government of India.

1.2              The BWEL was incorporated in 1978, by an Act of Parliament, through the nationalization and subsequent amalgamation of two erstwhile companies, Arthur Butler & Co. located at Muzaffarpur and Britannia Engineering Works located at Mokamah. The decision of the Government was driven by the industrial sickness in both the companies, which had forced the Government to take over their management. Subsequently, in 1983 a third unit was added at Industrial Estate (Bela) Muzaffarpur for manufacturing LPG cylinders. In 1986, BWEL was made a wholly owned subsidiary of Bharat Bhari Udyog Nigam (BBUNL) which is the holding company for 9 nationalised companies in the heavy engineering sector and comes under the auspices of the    Ministry of Heavy Industries. BWEL was referred to BIFR in 18.12. 2000

 

1.3              BWEL is headquartered at Patna and has two regional offices in Delhi and Kolkata.

  1.3(I)   Business Description  

BWEL manufactures railway wagons, sugar mill machineries & fabrications, castings and miscellaneous project equipment. Railway wagons comprise the bulk of the turnover of the company. The company has a wagon manufacturing capacity of 2500 FWU p.a. Railway wagons are produced at the Mokamah and Muzaffarpur units. The wagons are catered to the Indian Railways and Ministry of Defence. Some special purpose wagons are also produced according to specific customer requirements. The unit at Mokamah is capable of producing only broad gauge units while the unit at Muzaffarpur is equipped to produce both Broad gauge and Metre gauge units. In addition to railway wagons the units are capable of producing all relevant wagon components. BWEL diversified into turnkey projects in 1979 as part of its diversification strategy and a separate Project Division was set up in 1995. This division has successfully executed a number of turnkey projects.

 

The product range of the company is given below:

 

Product

Details

Railway Wagons Type of wagon manufactured:

§          Open Type Freight Wagon (BOXN)

§          Covered Type Freight Wagon (BCNA)

§          Flat Type Freight Wagon (BRNA)

Casting Jobs Grey Iron Castings including wagon components, bevel gear box, screws and other components.
Sugar Mill Machineries Complete Rollers, Roller Reshelling, Filter Press, Crystallizers, Sulphur Furnace, Condensers, Conveyor Mill Coupling, Molasses pumps and other allied equipment.
Steel Fabrications Fabrications suitable for the following:   §          Steel Plants

Thermal Power Plants

§          Oil Installations

§          Fertilizer units

§          Railway and Road Bridge Structural

Screw Pile Bridge Designing and manufacture of components for screw pile bridges with all relevant components to suit river width.
Coal Mining Equipment Coal Tubs, Mine Cars, Ropeway Buckets
LPG Cylinders Manufacturing LPG cylinders for domestic use
Projects Defence Road Trailers, Transmission Towers and Substation Structural

 

1.3(II)  Customers  

Over the years the company has built a broad customer base in almost all product categories. The primary customer for wagons is  the Indian Railways and about 98% of the revenue in this area of BWEL’s business accrues from purchase of freight wagons by the Indian Railways. The important customers for the different products are as follows:

 

Product Important Customers (Procurement)
Railway Wagons the Indian Railways

Ministry of Defence

Casting Jobs Sugar Mills in Uttar Pradesh, Bihar and Nepal

Uttar Pradesh State Electricity Board

Road Construction Department, Govt of Bihar

Steel Fabrications Road Construction Department, Govt. of Bihar

Irrigation Department, Govt. of Bihar

Heavy Engineering Corporation, Ranchi

BCCL - Western Coal Fields

Railway and Road Bridge Structural

FCI, Barauni

Rampur Engineering Works

Bihar State Electricity Board

Nagaland Paper & Pulp Mills

Eastern Railways

LPG Cylinders and Fuel Storage Tanks Indian Oil Corporation Ltd, HPCL and  Bharat Petroleum Corporation Ltd.

 

The principal customers by value are the Indian Railways, the predominant customer, Bihar Rajya Pul Nirman Nigam Limited, Numaligarh Refinery Limited, Bihar State Electricity Board and Oil companies like IOCL, BPCL and HPCL.

Since the predominant customer is the Indian Railways, the marketing is presently centralized at the BBUNL, the holding company, for the wagon manufacturing subsidiaries. Wagon orders are procured through participation in the tendering process of the the Indian Railways through the holding company, BBUNL. As far as wagons are concerned, BWEL does not have an export market. However it exports Cast Iron Rollers for sugar mills to Nepal.


The order book position as on 31.03.2002 is given below:

 

Product

Order Book

Wagons

Other items

Total

§          Physical Order for FWU:  860.0 &   Gross Value  of Rs.4472.00 Lakhs

§          Gross value of Rs. 162.08 Lakhs

Total Gross value of Rs. 4634.08 Lakhs

 

1.3(III)    Competitor Profile

There are several competitors who participate in the tendering process of the Indian Railways. Of these 7 are in the public sector and 6 in the private sector. A list of the important competitors is given below:

 

 Product Important Competitors
Public Sector

§          Burn Standard  Company Ltd.

§          Braithwaite & Co. Ltd., Kolkata

§          Jessop & Co. Ltd., Kolkata

§          Southern Structural Ltd., Chennai

§          Subsidiaries of Bharat Yantra Nigam ltd.

Private Sector

§          Titagarh Wagons Ltd., Kolkata

§          Modern Industry

§          Texmaco Ltd., Kolkata

§          Besco Ltd., Kolkata

§          CIMMCO,

§          Hindustan Engineering Industry

§          HGI

 

The largest capacities in the public sector are with Braithwaite & Co. and Burn Standard  Company Ltd. and with CIIMCO and Texmaco in the private sector. BWEL has a 11% market share of wagons and amongst the public sector players it has a 27% market share.

 

1.3(IV)  Strength and Opportunity Analysis

 

Strengths

 

q       Established brand name

q       ISO-9002 certified factories for wagon manufacturing

q       Location well connected by rail & road

q       Ample space available for future expansion at Mokamah & Bela

q       Skilled workforce with rich experience in steel erection & fabrication

q       Good track record 

q       Opportunities

q       Moving into value added wagons –

q       Increase thrust in the area of Pontoon Bridges and Screw Pile bridges

q       Focusing on oil companies for building overhead/underground fuel storage tanks.

q       Utilisation of the excess space in the units at Mokamah and Bela for expansion

q       Tapping export market for wagons

 


 

 

1.4       BWEL’s Client Profile

 

The principal customers by value are the Indian Railways, the predominant customer, Bihar Rajya Pul Nirman Nigam Limited, Numaligarh Refinery Limited, Bihar State Electricity Board and Oil companies like IOCL, BPCL and HPCL. 0  

Since the predominant customer is the Indian Railways, the marketing is presently centralized at the BBUNL, the holding company, for the wagon manufacturing subsidiaries. Wagon orders are procured through participation in the tendering process of the the Indian Railways through the holding company, BBUNL. As far as wagons are concerned, BWEL does not have an export market. However it exports Cast Iron Rollers for sugar mills to Nepal.

 

 

1.5       MANPOWER  

As on 1.4.2002 BWEL had 1604 nos of employees on roll comprising 1426 workman, 100 supervisors and 78 executives.

   

1.6       FINANCIALS

 

EQUITY BASE  (as on 31.03.2002)

  

 

Rupees in Lakh

SHARE CAPITAL

 

 

AUTHORISED

 

100,000 Equity Shares of Rs. 1000/- each

1000.00

 

ISSUED AND SUBSCRIBED

 

99924 Equity Shares of Rs. 1000/- each fully paid up.

Of the above issued and subscribed Equity Shares 20.000 shares were issued pursuant to a contract for consideration other than cash

 

999.24

 

 

SHARE DEPOSIT – PENDING ALLOTMENT

 

0.00

 

All shares are held by BBUNL being Holding Company and its nominees.


(a)  Profitability

1.      During the financial year 2001-2002, BWEL registered a net loss of Rs. 2687.13 lakhs as against  Rs.468.59 lakhs in the previous year. Operating result for the year 2001-2002 vis-à-vis 2000 – 2001 are tabulated below:         

                                                                                                        (Rs. In lakhs)

 

Particulars

2001-2002

2000 –2001

Sales

  3005.83

 4114.40

Gross Profit / (Loss)

(Ex-interest & depreciation)

 (2251.83)

 (313.60)

Cash Profit/ (Loss)

(2368.51)

 (408.17)

Net Profit/ (Loss)

(2687.13)

 (468.59)

 

 

2. Summary of BWEL’s Balance Sheet and Profit and Loss Account for the last three years is given below.

Balance Sheet                     (Rupees In lakhs)

As on

 

31st March

2000

31st March 2001

31st March 2002

LIABILITIES

a) Paid-up Capital

 

Government of India / BBUNL

813.00

813.00

999.24

ii) Share Deposit (Government of India/BBUNL) including conversion of loan to equity

       - 

167.39

     -

Borrowings from

 

i)                    Government of India / BBUNL

Plan

Non-Plan

 

303.75

80.00

 

166.36

              -

 

195.86

        -

ii) Banks/Financial Institution including Govt. of West Bengal.

Cash Credit

Debenture / Bond

 

 

270.47

           -

 

 

450.77

200.00

 

 

563.65

213.50

ii)                   Interest Accrued and due

580.94

620.60

639.43

Current Liabilities & Provisions

1721.48

2783.21

4123.20

TOTAL

3769.64

5201.33

6734.88

ASSETS
Gross Block

1631.59

1644.83

1665.01

Less : Cumulative Depreciation

869.88

930.30

989.41

Net Block

761.71

714.53

675.60

Capital Work-in-Progress

          -

                -

5.27

Investments

0.30

0.50

        -

Current Assets, Loans and Advances

2044.10

3056.58

1937.16

Misc. Expenditure (to the extent not written –off or adjusted)

              2.40

        -

       -

Accumulated Losses

961.13

1429.72

4116.85

TOTAL

3769.64

5201.33

6734.88

 

 

PROFIT & LOSS ACCOUNT

(Rs. in Lakh)

Year Ended

31st March 2000

31st March 2001

31st March 2002

INCOME

Sales

2502.68

4114.40

3005.83

Income from Projects

                -

241.05

116.38

Other Revenue

62.67

300.90

18.07

Accretion/(Decretion) to Work-in-Progress

(16.95)

170.20

(413.14)

Grant-in-aid (VRS)

--

300.00

--

TOTAL

2548.40

5126.55

2727.14

 

EXPENDITURE

Consumption of raw materials

1594.49

2684.43

1894.96

Project Expenses

         -

189.25

87.62

Stores, Spare Parts and Loose Tools Consumed

70.31

80.65

47.51

Employees’ Remuneration

1497.69

1690.24

1812.51

Excise Duty

12.24

33.52

11.12

Power & Fuel

123.12

189.24

158.71

Other Expenses

191.82

258.30

165.92

Interest

75.37

94.57

116.68

Depreciation

64.75

60.42

59.11

Grant-in-aid (VRS)

--

300.00

--

Nationalisation  Adjustment a/c written off

2.40

2.40

                      -

Debt written off

-

-

30.00

TOTAL

3632.19

5583.02

4384.14

Profit/Loss for the year

(before prior period adjustment and provisions)

(1083.79)

(456.47)

(1657.00)

Prior Period Adjustment

-

(12.12)

(524.46)

Provision

             6.02

-

(246.16)

Extra Ordinary Items (VRS)

-

-

(259.51)

Profit/(Loss) before Tax

(1077.77)

(468.59)

(2687.13)

Provision for Tax

--

--

--

Net Profit/ (Loss) after Tax

(1077.77)

(468.59)

(2687.13)

Loss brought forward from previous year

(116.64)

961.13

1429.72

Balance carried to Balance Sheet (Loss carried forward)

961.13

1429.72

4116.85

         

 

 

 

  Details on the Units

 

1.7              BWEL possesses two operational manufacturing units viz. Muzaffarpur & Mokamah units spread over the states of Bihar. They are engaged in manufacturing of Rolling Stocks, Structurals Fabrication. BWEL is one of the major Rolling Stock manufacturers in the country and has an annual capacity of 2500 FWU’s.  Its product range includes various types of Broad Gauge rolling stocks, such as BOXN, BCNA, & BRNA,

 

1.8              BWEL’s Cast lron Foundry is located at Bela Unit in the State of Bihar.  The facilities provided are capable for producing high quality cast iron.

      

BWEL have the following offices and works in India.

 

REGISTERED  & HEAD OFFICE

  Mauryalok, C - Block, Dak Bungalow Road

PATNA - 800 001

Tel: (0612) 223428 / 222369 / 225586

FAX: (0612) 231263      E-mail-bhawagon@bih.nic.in

   

REGIONAL OFFICES

 

Akashdeep Building,                                                            9A, Everest House,

26-A Barakhamba Road                                                       46-C Chowringhee Road

NEW DELHI - 100 001.                                                      KOLKATA - 700 071.  

Tel: (011) 2331 5639/2103                                                  Tel: (033) 22884133/22889992/22887955   FAX: (011) 2331 3339/2335 4567                                      FAX: (033) 22880972

                                                    

MANUFACTURING WORKS

 

MOKAMAH                                     MUZAFFARPUR                                           BELA( MUZAFFARPUR)

Dist. PATNA                                      P. Box No. 10                                                   Bela Ind. Estate

    Pin Code - 803 302                              Pin Code-842 001                                             P. Box No. 61

    Tel: (06132)32351                               Tel: (0621)214621/213779                              Tel: (0621) 274348/273853

    FAX: (06132) 32351                            FAX: (0621) 212351                                        FAX: (0621) 212351

 

 

2.0    Subsidiary Companies  

 

2.1       BWEL does not have any subsidiary company.

 

2.2              Details of capacity, Unit-wise performance are given in the tables below :

 

 

                           INSTALLED CAPACITY

   

Major Products   Installed Capacity
Wagons FWUs 2500
LPG Cylinders Nos. 100,000
Sugar Mill Machinery MT 1200

 


 

 

PRODUCTION PERFORMANCE FOR THE LAST 2 YEARS                    (Value in Rs. Lakhs)

WORKS

2001-2002

2000-2001

Qty

Gross

Billable

Qty

Gross

Billable

Mokamah

-  Wagon(FWUs)

-  Others (Rs Lakhs)

Total

    

    520

 

2704.00

-

2704.00

 

1017.98

-

1017.98

 

877.5

 

4563.00

146.89

4709.89

 

1779.55

146.89

1926.44

Muzaffarpur

- Wagon(FWUs)

- Projects&Oths

Total 

   

    905

 

 

   4706.00

       44.18

   4750.18

 

1716.87

    44.18

1761.05

 

1210

 

6292.00

342.04

6634.04

 

2320.56

342.04

2662.60

Bela

      -

    -

    -

 

-

-

Total BWEL

     

  7454.18

 2779.03

 

11343.93

4589.04

 

Operating Units of BWEL

 

1A. Mokamah : BWEL

 Location

MOKAMAH

Disstt. PATNA

Pin Code - 803 302

Tel: (06132)32351

Tel: (06132)32351

Main Products Railway Rolling Stock, Wagons & Structural Fabrication
Main Industries served Railways, Non-Railways ( Oil Sector, NALCO)
Production :

Phy Unit

2001-02

2000-01

- Wagon

- Others

FWUs

Rs lakhs

520.0

-

877.5

146.89

Performance :

 

2001-02

2000-01

- Sales Turn over

- Net Profit

Rs. Lakhs

Rs. Lakhs.                         

1126.33

(651.78)

1863.00

(221.53)

   Manpower (Nos.) :-                                    As on 1. 04. 02  
Land Area

 

-                                                             21

-                                                             21

-                                                              -

-                                                           103

-                                                           521

                               666                                                       

Other Information

 ( Acres)

Free hold

 

 

 39.23

 

 

¨      ISO accredited manufacturing facilities

 

         

    1B. Mazzaffarpur Works : BWEL

 

 Location  MUZAFFARPUR

 P. Box No. 10

Pin Code-842 001

Tel: (0621)214621/213779

FAX: (0621) 212351

 

Main Products

Railway Rolling Stock, Wagon,Structural Fabrication.

Main Industries served Railways, Oil Sector ( IOCL, HPCL)
Production : Phy Unit

2001-02

2000-01

-         Wagon

-     Projects&Oths

FWUs

Rs.Lakhs

905.0

44.18 

1210.0

342.04

Performance :  

 

 

-         Sales Turn Over

   (Incl. Project income)

- Net Profit

Rs. Lakhs

 

Rs. Lakhs

1995.88

 

(448.49)

2484.00

 

247.10

   Manpower (Nos.):                            As on 1. 4. 02 
Officer

Supervisor   

Staff

Sub-Staff / Security

Workmen

Total

-                          24

-                          48

-                          59                   

-                               53

-                             541

-                         725

Land Area

 

 ( Acres)

Free hold

 

  6.69    

Other Information

¨      ISO accredited manufacturing facilities

Manufacturing of Wagons

       

 

1C. UNITS AS A WHOLE - BWEL

 

Location  
Main Products

Railway Rolling Stock, Non-Railway Wagons & Structural Fabrication, Iron Castings.

Main Industries served

Railways, Non Railways,Oil Sector, NALCO, Steel Plants, Port Trusts etc.

Production : Phy Unit

2001-02

2000-01

-         Wagon

-         Projects&Oths

 

FWU’s

Rs.Lakhs

 

1425.0

44.18

 

2087.5

488.93

 

Performance :  

2001-02

2000-01

- Sales Turn Over

- Net Profit

Rs.Lakhs

Rs.Lakhs

3122.21

(2687.13)

4355.45

(468.59)

 
 
   Manpower (Nos.) :                                           As on 1. 04. 02 
Officer

Supervisors   

Staff

Sub-Staff /Security

Workmen

Total

-                                  78 

-                                100  

-                                  78

-                                 221

-                               1127   

-                               1604

Land Area

 

                    

Free hold ( Acres)

-  Factory premises

-  Housing Colony

    Total   :

Lease hold (Rs. Lakhs):

 

 

 

-      35.09

-          18.86

-          53.95

 4.40 

      

 

Other Information

¨      ISO accredited manufacturing facilities

# Manufacturing of Wagons

¨          Installed capacity :

# Wagon : 2500 FWUs

       

 

2.3       Unitwise Financial Performance for the year ended  31.03.2002 is as

            under :

 

(Rs. in Lakhs)

Description

Mokamah

Mazzaffarpur

Bela ,HO etc

Total BWEL

A.      PRODUCTION

1.       Gross Prod.

2.     Free Supply

 

2704.00

1686.02

 

4750.18

                 3043.67

 

            -

             -

 

7454.18

4675.15

Billable Production

1017.98

1761.05

             -

2779.03

 

B.       INCOME

3         Sales

4         Income from Project

5         Accr(+)/Decr(-)

6         Other Income

 

 

1126.33

            -

            (165.75)

                 7.59           

 

 

1879.50

116.38

(247.39)

                   10.03                

 

 

               -

               -

              -

           0.45

 

 

 

3005.83

116.38

(413.14)

18.07

 

7         Gross Outturn

 

968.17

1758.52

            0.45

2727.14

C.      MFG. & OTHER EXPENSES

8         Raw Mat. Bought Out

       Stores & Spares consumed

       (Incl.of Project Expenses)

9         Power & Fuel

10     Employment Cost

11     Excise Duty

12     Adm. OH & other cost.

13     Total (8 to12)

14     Gross Margin Before Prior Prd/ Provision / EOI

15     Prior Period / Provision /EOI

16     Gross Margin

17     Bank & Other Interest.

18     Cash P/(L) w/o GOI Interest

19     GOI Interest

20     Cash P / (L)

21     Depreciation

22     DRE / WriteOff

23     Net P/(L) before tax.

 

 

744.01

 

 

                75.49

543.83

4.51

46.59

1414.43

(446.26)

 

179.27

(625.53)

                -

(625.53)

               -

            (625.53)

             26.25

          -

          (651.78)

 

1286.08

 

 

83.22

685.99

6.61

43.22

2105.12

(346.60)

 

71.15

(417.75)

1.28

(419.03)

                     -

(419.03)

29.46

                   -

              (448.49)

 

            -

            -

 

            -

582.69

                -  

76.11

658.80

(658.35)

 

550.20

(1208.55)

92.33

(1300.88)

23.07

(1323.95)

3.40

259.51

(1586.86)

 

2030.09

 

 

158.71

1812.51

11.12

165.92

4178.35

(1451.21)

 

800.62

(2251.83)

93.61

(2345.44)

23.07

(2368.51)

59.11

259.51

(2687.13)

 

 

GOVERNMENT OF INDIA

 

MINISTRY OF DISINVESTMENT


 


ANNEXURE – I : ADVERTISEMENT

 

Bharat Bhari Udyog Nigam Limited

(A Govt. of India Undertaking)

 

This announcement is neither a prospectus nor an offer or invitation to the public for sale of securities.

 “Invitation of Expression of Interest for Strategic Sale of Shareholding in Bharat Wagon & Engineering Company Limited”

 

Bharat Bhari Udyog Nigam Limited (BBUNL) intends to sell 74% or 100%, of its holding in its wholly owned   subsidiary   Bharat  Wagon   & Engineering Co. Limited (BWEL) to a strategic investor with transfer   of  management. Ernst & Young (“EYPL” or the Advisor) has been retained as Advisors by BBUNL in connection with the proposed strategic sale.

 

           BWEL   is   one   of   the  largest wagon manufacturers in India with an installed  capacity  of 2500    FWUs per annum. It is backed by composite infrastructure for manufacture of Wagons and components includingan Iron foundry.  The company has three manufacturing units in Bihar.

 

Company(ies)/Joint Venture(s)/Consortium(s) (incorporated or to be incorporated) interested in participating in the proposed disinvestment are required to submit Expression of Interest (EoI) at the undermentioned address, not later than 17.30 hours by 10th February, 2003.  

The Preliminary Information Memorandum (PIM) containing further information about BWEL, qualification requirements, formats for EoI and RFQ can be obtained from the undermentioned officer or accessed at www.bbunl.com/ www.divest.nic.in.

 

q       Debashish Ghoshal

 

VICE PRESIDENT, Corporate Advisory Services

Ernst & Young Pvt. Ltd.

22 Camac Street

3rd Floor

Kolkata – 700 016

Phone: 033-22811224

Email: Debashish.Ghoshal@in.eyi.com

               

               

 		  

q       Jayesh Desai

 

Director, Corporate Advisory Services

Ernst & Young Pvt. Ltd.

Ernst & Young Tower,

B-26 Qutab Institutional Area

New Delhi: 110016

Phone: 011-26611004

Email: Jayesh.Desai@in.eyi.com

               

               

 
 

 

 

 

 

 

 

 

 

 

 


 

GoI/BBUNL reserves the right to withdraw from the process or any part thereof, to accept or reject      any  or all  offers at any stage of the process and/or modify the process or any part  thereof  or  to  vary   any  terms  at  any  time without assigning any reason whatsoever. No financial obligation, whatsoever shall accrue to GoI/BBUNL in such an event. Neither   GoI   nor BBUNL    shall    be    responsible    for    non   receipt    of   correspondence  sent   by post/courier/e-mail/fax.

 

GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT


 


ANNEXURE – II : EXPRESSION OF INTEREST

 

(To be forwarded on the letterhead of the interested party/lead bidder/member of the consortium submitting the EOI)

 

Reference No…………….                                                               Date ……………..

 

 

Shri  Debashish Ghoshal

Vice President (Corporate Advisory Services)

Ernst & Young Private Ltd.

22, Camac Street, 3rd Floor,

Kolkata 700 016

 

 

Sub : GLOBAL INVITATION OF EXPRESSIONS OF INTEREST FOR DISINVESTMENT OF 74%/100% STAKE OF BHARAT BHARI UDYOG NIGAM LTD. (BBUNL)  IN BHARAT WAGON & ENGINEERING CO. LIMITED (BWEL), A WHOLLY OWNED SUBISIDARY

 

Sir,  

This is with reference to the advertisement dated ……….. inviting Expression of Interest for Bharat Wagon & Engineering Co. Ltd. (BWEL).

 

As specified in the advertisement, we have read and understood the contents of the Preliminary Information Memorandum (PIM)  and  are  desirous  of  participating  in the above disinvestment process, and for this purpose :

 

We proposes to submit our EOI in individual capacity as ……………………… (insert company name)  

 

 

OR

 

We have formed/proposes to form a consortium comprising  ……… members as follows:

 

1.                  …………………………………………  (insert company name)

2.                  …………………………………………  (insert company name)

3.                  …………………………………………  (insert company name)

 

OR

We are an association of BBUNL/its subsidiary/employees.

 

We confirm that we/our consortium/proposed consortium satisfies the eligibility criteria set out in relevant sections of the PIM including the guidelines for qualification of bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment issued by the Government of India vide Department of Disinvestment OM No.6/4/2001-DD-II dated 13th July, 2001 and subsequent amendments/clarifications thereto. The Statement of Legal Capacity and Request for Qualification as per formats indicated hereinafter, duly signed by us/respective members, who jointly satisfy the eligibility criteria, are enclosed. 

We certify that in regard to matters other than security and integrity of the country, we have not been convicted by a Court of law or indicated or adverse orders passed by a regulatory authority which would cast a doubt on our ability to manage the public sector unit when it is disinvested or which relates to a grave offences that outrages the moral sense of the community.

 

We further certify that in regard to matters relating to security and integrity of the country, we have not been charge-sheeted by any agency of the Government or convicted by a Court of Law for any offence committed by us or by any of our sister concerns.

 

We further certify that no investigation by a regulatory authority is pending either against us or against our sister concerns or against our CEO or any of our Directors/Managers/employees.

 

We undertake that in case due to any change in facts or circumstances during the pendency of the disinvestment process, we are attracted by the provisions of disqualification in terms of the subject guidelines, we would intimate the BBUNL of the same immediately.

 

We shall be glad to receive further communication on the subject.

 

Yours faithfully,

 

Authorised Signatory

 

                                    For and on behalf of the party/consortium

                       

Enclosure :

 

1.      Statement of Legal Capacity

2.      Request for Qualification

 

GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT


 


 

  ANNEXURE – III : STATEMENT OF LEGAL CAPACITY

 

(To be forwarded on the letterhead of the interested party/each member of the consortium submitting the EOI)

 

 

Reference No……………………………..                                       Date……………..

 

 

Shri  Debashish Ghoshal

Vice President (Corporate Advisory Services)

Ernst & Young Private Ltd.

22, Camac Street, 3rd Floor,

Kolkata 700 016

 

 

Sub : GLOBAL INVITATION OF EXPRESSION OF INTEREST FOR DISINVESTMENT OF 74%/100%  STAKE IN BHARAT WAGON & ENGINEERING CO. LIMITED (BWEL), A WHOLLY OWNED SUBISIDARY OF BHARAT BHARI UDYOG NIGAM LIMITED (BBUNL)

 

Sir,

 

This is with reference to the advertisement dated …………… inviting Expression of Interest for Bharat Wagon & Engineering Co. Limited (BWEL).

 

We have read and understood the contents of the PIM and the advertisement and pursuant to this hereby confirm that :

 

We satisfy the eligibility criteria laid out in the PIM and the advertisement.

 

We are a member of the consortium (constitution of which has been described in the Expression of Interest) which jointly satisfies the eligibility criteria as detailed in the PIM.*

 

We have agreed that ………………….(insert member’s name) will act as the lead member of our consortium.*

 

We have agreed that …………………. (insert individual’s name) will act as our representative on our behalf and has been duly authorized to submit the EOI. Further, the authorized signatory is vested with requisite powers to furnish such letter and Request for Qualification and authenticate the name.*

 

Yours faithfully,

 

 

Authorised Signatory

 

For and on behalf of (party/member)

 

* Strike off whichever clause is not applicable.

 

GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT


 


 

ANNEXURE – IV : REQUEST FOR QUALIFICATION

 

(To be submitted in respect of interested party/each member of the consortium)

 

 

Name of the interested party(ies)/Member(s) …………………………………………..

 

1.      Constitution (Tick, wherever applicable)

 

i)                    Public Limited Company

ii)                   Private Limited Company

iii)                 Others, if any (Please specify)

 

2.      Sector (Tick, wherever applicable)

 

i)                    Public Sector

ii)                   Joint Sector

iii)                 Others, if any (Please specify)

 

3.      Details of Shareholding

 

4.      Role/Interest of each Member in the Consortium (if applicable)

 

5.      Nature of business/products dealt with

 

6.      Date & Place of incorporation

 

7.      Date of commencement of business

 

8.      Full address including phone Nos./Fax No.

 

(i)                  Registered Office

(ii)                Head Office

 

9.      Address for correspondence

 

10.  Basis of eligibility for participating in the process (Please mention details of your eligibility).

 

11.  Please attach most recent Audited Statement of Accounts/Annual Report. Please provide a Chartered Accountant/Auditor’s Certificate certifying the Net Worth.

 

12.  Please provide details of all contingent liabilities that, if materialised, that have or would reasonably be expected to have a material adverse affect on the business, operations (or results of operations), assets, liabilities and/or financial condition of the Company, or other similar business combination or transaction.

 

13.  Contact Persons :

 

i)    Name             :

ii)   Designation   :

iii)   Phone No.     :

iv)  Mobile No.      :

v)  Fax No.            :

vi)  E-Mail             :

 

Yours faithfully,

 

 

Authorised Signatory

For and on behalf of the (party/member)

 

 

Authorised Signatory

For and on behalf of the Consortium

 

Place :

Date  :

 

Note :  Please follow the order adopted in the Format provided. If the interested party is unable to respond to a particular question/request, the relevant number must nonetheless be set out with the word “No response given” against it.


 

GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT


 


ANNEXURE – V  : GOVERNMENT CIRCULAR

 

 

No.6/4/2001-DD-II

 

 

Government of India

Ministry of Disinvestment

Block 14, CGO Complex

New Delhi

 

 

Dated 13th July, 2001

 

 

OFFICE MEMORANDUM

 

Sub : Guidelines for qualification of Bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment

 

Government has examined the issue of framing comprehensive and transparent guidelines defining the criteria for bidders interested in PSE-disinvestment so that the parties selected through competitive bidding could inspire public confidence. Earlier, criteria like net worth, experience 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 seeking to acquire stakes in public sector enterprises through disinvestment.

 

(a)    In regard to matters other than the security and integrity of the country, any conviction by a Court of Law or indictment/adverse order by a regulatory authority that casts a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, or which relates to a grave offence would constitute disqualification. Grave offence is defined to be of such a nature that it outrages the moral sense of the community. The decision in regard to the nature of the offence would be taken on case to case basis after considering the facts of the case and relevant legal principles, by the Government.

 

(b)    In regard to matters relating to the security and integrity of the country, any charge-sheet by an agency of the Government/conviction by a Court of Law for an offence committed by the bidding party or by any sister concern of the bidding party would result in disqualification. The decision in regard to the relationship between the sister concerns would be taken, based on the relevant facts and after examining whether the two concerns are substantially controlled by the same person/persons.

 

(c)    In both (a) and (b), 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 bidders for various disinvestment transactions, which have not been completed as yet.

 

(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 Expression of Interest (EOI) from the interested parties. The interested parties would be required to provide the information on the above criteria, along with their Expression of Interest (EOI). The bidders 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 its CEO or any of its Director/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, a similar undertaking shall be obtained along with EOI.

 

 

       Sd/-

       (A.K. Tewari)

       Under Secretary to the Government of India.

 

       To

    

       As per list attached.

 

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