GOVERNMENT OF INDIA MINISTRY OF DISINVESTMENT

 

 

 

          PRELIMINARY INFORMATION MEMORANDUM (PIM)  

     OF 

NEPA LIMITED

TABLE OF CONTENTS    

  1.      SBI Capital Markets Ltd. (“SBICAP”) has been retained as the sole advisor by Government of India (GoI) for the disinvestment of 72.31% of the stake in NEPA Limited (“NEPA” or “the Company”).

 

2.      The sole purpose of this Preliminary Information Memorandum (“PIM”) is to assist the recipient to participate in the aforesaid disinvestment process. This PIM is not intended to form the basis for any investment decision and does not constitute, either express or implied, an offer to sell or a solicitation of an offer to buy the stake in NEPA. Accordingly, interested parties are advised to carry out their own due diligence, investigations and analysis of any information contained or referred to herein or made available at any stage in the disinvestment process.

 

3.      This PIM has been delivered to interested parties for information purposes only and upon the express understanding that such parties will use it only for the purpose set forth above. It does not purport to be all inclusive or contain all the information about NEPA. While this document has been prepared in good faith, no representation or warranty, express or implied, is or will be made, and no responsibility or liability will be accepted by NEPA, SBICAP or the Government of India (GOI) or any of their employees, advisors or agents as to or in relation to the accuracy or completeness of this document or any other oral or written information made available to any interested recipient or its advisors at any time during the disinvestment process and any liability thereof is hereby expressly disclaimed. The PIM may contain/include certain estimates, projections, statements, targets and forecasts with respect to the Company. These reflect and are based on the various assumptions made by the management, officers or employees of the Company and/or  SBICAP, which as well as the information on which they are based may or may not be accurate. Neither the Company or SBICAP or affiliates, subsidiaries, advisors, directors, officers or employees or agents of the Company or SBICAP make any representations and/or warranty in respect of, and no reliance should be placed on any estimates, projections, statements, targets and forecasts or the assumptions on which they may be based. The opinions in this memorandum have been expressed in good faith. Interested parties should rely on their own judgement only in assessing future business conditions and prospects of NEPA. Any liability is accordingly expressly disclaimed even if any loss or damage is caused by any act or omission on part of the aforesaid, whether negligent or otherwise.  

 

4.      Neither this document nor anything contained herein shall form a basis of any contract or commitment whatsoever. Any prospective purchaser will be required to acknowledge in the purchase contract that he has not relied on or been induced to enter into such agreements by any representation or warranty, save as expressly set out in such an agreement.

 

5.      Any information contained in this document will be superseded by any later written information on the same subject made available to the recipient by or on behalf of NEPA, GoI or SBICAP. NEPA, GoI and SBICAP undertake no obligation to provide the recipient with any additional information or update this document or to correct any inaccuracies therein which may become apparent and reserve the right, at any time and without advance notice, to change or modify the procedure or process for disinvestment, terminate the due diligence or negotiations or any part of or the entire disinvestment process prior to signing of any binding purchase agreement.

 

6.      This document has not been filed, registered or approved in any jurisdiction. Recipients of this document, particularly in jurisdictions outside India, should inform themselves of and observe any applicable legal requirements.

 

2.1         Introduction

1.      NEPA Limited (“NEPA” 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. The Company is located at Nepanagar in the Khandwa district of Madhya Pradesh.

  2.      The Company went into commercial production with effect from April 26^th, 1956 and has been a single product company producing only Standard Newsprint. The Company has, however, broadened its product mix and initiated the manufacture of Writing & Printing Directory and Light Weight Board Printing Papers of acceptable quality. It has also introduced the NEPA 44 GSM newsprint for the first time in the Indian markets. The Company utilizes environment friendly waste paper as the raw material in its production process and its client base includes leading national and regional newspapers.  

3.      As a part of its disinvestment programme, GoI intends to divest 72.31% its stake in NEPA along with transfer of management to a Strategic Investor.

4.      SBI Capital Markets Ltd. (SBICAP) has been retained as Advisor to GoI for the proposed disinvestment process and matters relating thereto.

 

2.2         Advertisement inviting EOI

An advertisement has been issued in the newspapers 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.

 

2.3         Eligibility Criteria

Indian Companies, Overseas Corporate Bodies (OCBs), Foreign Companies (subject to such foreign companies obtaining all statutory approvals from GoI /FIPB/ RBI etc. by themselves) must meet the following criteria (based on audited results):

 

                          I.      At least 3 years’ manufacturing experience in any industry

                       II.      Net worth (excluding revaluation reserves) of at least Rs.250 million as on March 31^st, 2002

                     III.      Annual turnover of at least Rs.500 million for the year ended March 31^st, 2002.

 

For a consortium (incorporated or unincorporated), at least one of the members of the consortium should meet the above mentioned eligibility criteria no.I and the combined net worth and turnover of the constituent entities of the consortium should meet the above mentioned eligibility criteria no.II & III. Also, the leader of the consortium should meet at least 51% of the above mentioned eligibility criteria No. II & III. Further, in the case of consortium bid, the networth and turnover of only those members of the consortium shall be counted who propose to take at least 10% of the equity stake in the company promoted/to be promoted by the consortium members for acquiring 72.31% equity in NEPA Ltd.

 

1.      Where the financial statements are 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.

 

2.      Definition

  Net Worth = Equity Share Capital + Reserves (excluding revaluation reserves)

 

  2.4         Format and Submission of EOI

1.      Expression of Interest may be submitted by Indian Companies, Overseas Corporate Bodies (OCBs), Foreign Companies (subject to such foreign companies obtaining all statutory approvals from GoI /FIPB/ RBI etc. by themselves), either individually or as a consortium (incorporated or unincorporated), for holding 72.31% equity of NEPA.

  2.       The interested parties should submit, in duplicate, the ‘EOI Package’ comprising an ‘Expression of Interest’ as per Annexure II, a ‘Statement of Legal Capacity’ as per Annexure III and a ‘Request for Qualification’ (RFQ) as per Annexure IV. The EOI must be duly signed by an authorized representative of the interested party or in case of a consortium, by the duly authorized representative of the consortium.  In addition, the Statement of Legal Capacity and RFQ will have to be submitted by the interested party and each member of the consortium. The RFQ should be duly filled in and accompanied by the following details:

Ø In case of a sole bidder

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

2.         Write-up on:

a.      Profile of the sole bidder

b.      A statement of reasons for strategic interest in NEPA

c.       Any other information considered material

 

Ø      In case of a consortium bid

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

§         Write-up on:

a)      Lead bidder

i)          Profile of the lead bidder

ii)        A statement of reasons for strategic interest in NEPA

iii)     Any other information considered material by the lead bidder

b)     Other member companies

i)          Profile of member companies in the consortium

ii)        Any other information considered material

 

3.      Any subsequent change by way of withdrawal/substitution of any member of the consortium or any change affecting the composition of the consortium may be permitted up to the stage of submission of details of the investment structure or till such time as notified by GoI/ Advisors but not later than the submission of the financial bid. GoI has the sole discretion to determine the impact of the change in membership on the structure and quality of the consortium and reject a proposal without assigning any reason whatsoever.

 

4.      The EOI Package must be in English and each copy should be bound in a separate volume.  Submission of the aforesaid documents by fax, e-mail or any other electronic means will not be acceptable.  The EOI and RFQ, duly completed, should be submitted not later than 1700 Hrs. (Indian Standard Time) on 7.3.2003 in a sealed envelope superscribed “Private and Confidential – Expression of Interest for NEPA” at the following address, marked to the attention of any of the under-mentioned persons:

 

 

It is the responsibility of the interested party(ies) alone to ensure that its EOI Package with required documents is delivered at the above mentioned address by the stated time and date. NEPA/GoI/SBICAP shall not be responsible for non-receipt of correspondence.

2.5         Disqualifications

 

1.      GoI/SBICAP shall not consider for the purpose of qualification, the EOI which has been found to be incomplete in content or attachments or authenticity.

  2.      Without prejudice to any other rights or remedies available to GoI/SBICAP, a company/consortium may be disqualified and its EOI dropped from further consideration for any of the reasons listed below:

 

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

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

Ø      Only one EoI should be submitted by a Company either individually or as a consortium in response to the advertisement dated 31.1.2003.  Multiple EoIs would be disqualified.

  3.      If any information becomes known after the interested party has been qualified to receive the information memorandum which would have entitled GoI/SBICAP to reject or disqualify the relevant company/consortium, GoI/SBICAP reserves the right to reject the interested party at the time or at any time after such information becomes known to GoI/SBICAP. 

  4.      Further, Government of India has issued guidelines for disqualification of bidders seeking to acquire any public sector enterprises through the process of disinvestment vide Department of Disinvestment OM No.6/4/2001-DD-II dated 13th July 2001, a copy of which is enclosed as Annexure-V.  Entities interested in participating in the proposed disinvestment 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 NEPA. Further, such persons or companies entities and/ or their sister concern(s) should not have any charge sheet against them by any agency of the GoI or any court of law, which involves a matter concerning the security and integrity of India. The final decision in this regard would be taken by the GoI. 

  The interested party(ies) are required to read the guidelines and satisfy themselves that they are qualified to bid for the stake in NEPA through the process of disinvestment and give an undertaking to the effect that they are qualified to bid for the stake in NEPA 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 13.7.2001, 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, 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.

5.      Where the interested party is a consortium, GoI may disqualify the entire consortium for any of the reasons specified in paragraph numbers 2.5(1), 2.5(2), 2.5(3) and 2.5(4), even if it applied to only one member of the consortium.

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

7.      The PIM along with its enclosures does not constitute a commitment on the part of NEPA/GoI/SBICAP other than to provide further information on NEPA. Furthermore, this document confers neither the right nor an expectation on any party to participate in the proposed disinvestment process. The GoI/SBICAP 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 reserves the right to accept or reject any /all offer(s) without assigning any reasons.  No financial obligation whatsoever shall accrue to GoI in such an event.  GoI shall not be responsible for any non-receipt of correspondence sent by post/courier/e-mail/fax.

2.6         Future Process

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, GoI/SBICAP require any clarification, it reserves the right to request such information from any or all of the companies/consortia and the companies/consortia will be obliged to provide the same within reasonable time frame.

 

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).  QIPs will be provided with the Confidential Information Memorandum (CIM) and shall be invited to participate further in the process, which would described in detail in the Confidential Information Memorandum (CIM).  QIPs will get an opportunity to conduct due diligence and take up site visits and will also have access to data rooms and hold discussions with the management of NEPA/GoI/officials of Ministry of Heavy Industry & Public Enterprises / Ministry of Disinvestment, Government of India.  The rules regarding access to information in the data rooms will be provided to the QIPs later.  The QIPs will be invited to submit their proposal and a binding price bid.

 

3.      The transaction is subject to the approval of Board for Financial and Industrial Reconstruction (BIFR).

 

2.7         Enquiries

 

GoI/SBICAP reserve the right not to respond to questions 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 GoI/SBICAP 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 GoI/SBICAP has not responded to any question/ provided any clarification.

 

2.8         Governing Laws/Jurisdiction

           

The laws of Union of India shall govern all matters relating to the disinvestment process and the bidding procedure.  Only Courts at New Delhi (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 disinvestment process and the bidding procedure.

 

 

3.1         Introduction

 

1.      NEPA Limited (“NEPA” 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. The Company is located at Nepanagar in the Khandwa district of Madhya Pradesh.

 

2.      The Company was incorporated on January 25^th, 1947 as a Government of India undertaking with M/s Nair Press Syndicate Limited as the Management Agency from 1947 to 1949. Its Management was taken over by the then State Government of Central Province and Berar in October 1949. Thereafter, the then Central Provinces Government nominated a Managing Director to take charge of the affairs of the Company from the Managing Agents. The Central Government acquired the controlling interest in 1959 by the conversion of loans into equity.  Commercial Production started in April 1956.  Originally named “ The National Newsprint & Paper Mills Limited “ its name was changed to NEPA Limited with effect from February 21^st, 1989.

 

3.      NEPA is the pioneer newsprint manufacturer of India. It commenced production in April 1956 with a total installed capacity of 30,000 tpa.  The main raw materials were Salai wood and Bamboo, which were available in abundance in the forests around Nepanagar. The Company currently operates on environment friendly Wastepaper with a total installed capacity of 88,000 tpa.  NEPA has a wide range of products and has introduced the NEPA 44 GSM newsprint to the Indian markets.

 

4.      The manufacturing unit and the registered office of the Company are located at Nepanagar in the Khandwa district of Madhya Pradesh.

 

5.      NEPA is one of the first Indian newsprint companies to completely switch over to the environment friendly waste paper as the raw material and is the first to manufacture 44 GSM paper in the Indian newsprint industry.

 

3.2         Key strengths of NEPA

  Ø      Nepa is a pioneer newsprint manufacturer of India and had started its operations based on Salai Wood and bamboo, which is largely available in the region. However, the decrease in import duties and lack of protection to the domestic newsprint manufacturers resulted in huge losses for most newsprint manufacturers in India.  Nepa was one of the first to switch completely to waste paper in order to decrease its cost structure. The switchover to the eco-friendly raw material base was brought about by the in-house technical expertise of Nepa without any capital assistance from the promoters of the Company.  The switch over to the new raw material base helped the company in registering operating profits when the international newsprint prices were on the rise. The Company registered operating profits of around Rs. 10 crores in FY 2001, when the newsprint prices were firm.

 

Ø      Nepa has a developed infrastructure and township to cater to all its operational and social requirements.  The factory and township are based on a total area of around 350 acres with a dedicated railway station, Nepanagar. The total asset base (gross value) aggregated Rs.114 crores as on 31^st March 2002.

 

Ø      The clients of NEPA include major newspaper publishing houses like Dainik Bhaskar Group, Nava Bharat Group, Hindustan Times Group, Jagran Prakashan Group, Dainik Jagran, etc.

 

Ø      NEPA has experienced managerial and technical personnel with a total staff strength of 1497 permanent employees. The Company has successfully completed a Voluntary Retirement Scheme in October 2002, which was availed of by 380 employees.

 

3.3         Financials

Equity base

 

The Company has 10,53,48,164 issued and outstanding equity shares, par value Rs. 10/- per share, as on 31st March 2002. The GoI has subsequently decided to convert the non-plan assistance of Rs. 2800.04 lakhs and outstanding normal interest of Rs. 604.84 lakhs as on March 31, 2002 into equity and waiver of penal interest of Rs.160 lakhs subject to induction of a Strategic Partner. Thus, the Company will have 13,93,96,991 fully paid-up shares upon the conversion of the above loans. The Government of India would own and control 13,70,44,771 of the Company’s issued and outstanding equity shares, representing 98.31 % of the Company’s issued and outstanding equity shares after taking into account the conversion of loans into equity.

 

Profitability

 

NEPA had been incurring operating losses due to its high cost structure and the reduction in import prices.  The company discontinued operations in 1996-97 and subsequently restarted operations based on a waste paper technology in 1997-98. Nepa was referred to BIFR in 1998 following a complete erosion of its networth. The Company’s financial results from 1997-98 to 2001-02 have been provided hereunder:

  A snapshot of the performance of NEPA for the last five years is given below:

 

(All figures in Rs. lacs unless specified otherwise)

 

	1997-98	1998-99	1999-2000	2000-01	2001-02
Income from Operations:
Net Sales	6561.8	9159.91	9767.48	13079.49	9600.71
Other related income	139.78	191.68	154.48	420.8	205.5
Operating Income	6701.58	9351.59	9921.96	13500.29	9806.21
Expenditure:
(Accretion)/Decretion to Stocks	-378	-705	-29	-95	-396
Material Costs & Consumable Stores	4097	4859	4831	6636	5703
Consumable Stores	167	192	215	270	227
Power & Fuel Costs	1721	2672	2408	2374	2512
Employee Costs	1448	1622	1709	1748	2893
Other Manufacturing Expenses	472	702	758	873	898
Selling Expenses	115	116	235	111	158
Other Expenses	414	914	643	561	614
Cost of Sales	8056	10372	10770	12478	12770
OPBDIT	(1355)	(1021)	(848)	1022	(2963)
Interest and Finance Charges	1230	1324	1130	652	896
OPBDT	(2585)	(2344)	(1977)	370	(3859)
Depreciation	660	171	152	144	118
OPBT	(3245)	(2515)	(2129)	226	(3977)
Extraordinary Income/(Expenses) (prior period expenses)	1229	564	3081	261	461
PBT	(2016)	(1951)	952	486	(3516)
PAT	(2016)	(1951)	952	486	(3516)

 

 

	1997-98	1998-99	1999-2000	2000-01	2001-02
					Before conversion of loans to equity*	After conversion of loans to equity*
Liabilities
Share Capital	6486	6486	10539	10539	10539	13944
Reserves & Surplus	639	372	11	11	11	11
Total Debt	7131	8776	3004	4238	5059	1494
Current Liabilities	6802	6580	7971	8319	9798	9798
Total Liabilities	21058	22213	21526	23107	25407	25247
Assets
Gross Block	11735	11679	11758	11393	11437	11437
Net Fixed Assets	2689	2645	2651	2573	2516	2516
Deferred Revenue Exp.	0	0	0	0	627	627
Current Assets	6937	6186	6445	8590	6804	6804
Total Assets	9626	8831	9096	11163	9947	9947
Accumulated Losses	11,432	13,382	12,430	11,944	15,460	15,300

 

*and waiver of penal interest of Rs.160 lakhs

 

ANNEXURE –I  

GOVERNMENT OF INDIA

MINISTRY OF DISINVESTMENT

 

STRATEGIC SALE OF SHAREHOLDING IN NEPA LIMITED (NEPA) 

 

EXPRESSION OF INTEREST

 

(This announcement is neither a prospectus nor an offer/invitation to the public for sale of shares, securities or debentures to the public.)

 

The Government of India (“GoI”) intends to disinvest a 72.31% shareholding in NEPA Limited (“NEPA”) to a strategic partner with transfer of management control and has appointed SBI Capital Markets Ltd. (SBICAP) as the Advisor to GoI to advise and manage the disinvestment process.

 

NEPA Limited (NEPA) is engaged in manufacturing and marketing of newsprint. The Company has its manufacturing facilities at Nepanagar, Khandwa, Madhya Pradesh with a total installed capacity of 88,000 tonnes per annum (tpa). For the financial year ended March 31, 2002, NEPA incurred a Net Loss of Rs. 351.6 million on a total turnover of Rs 960 million. NEPA was referred to BIFR in the year 1998 following erosion of its networth.

 

Expression of Interest may be submitted by Indian Companies, Overseas Corporate Bodies (OCBs), Foreign Companies (subject to such foreign companies obtaining all statutory approvals from GoI /FIPB/ RBI etc. by themselves), either individually or as a consortium (incorporated or unincorporated), for holding 72.31% equity of NEPA.

 

Interested Parties are requested to submit their EOI along with a Request for Qualification (RFQ) in the prescribed format specified in the Preliminary Information Memorandum (PIM) at the under-mentioned addresses, not later than 17.00 hrs (IST) on 7.3.2003.  The PIM containing further information about NEPA, eligibility criteria, formats of EoI and RFQ, etc. can be obtained either from the under-mentioned persons or accessed at www.divest.nic.in or www.dhi.nic.in or www.sbicaps.com. All queries related to the EOI may be addressed to the under-mentioned persons.

 

Gyan Mohan Senior Vice President & Group Head M&A& Advisory SBI Capital Markets Ltd. 202, Maker Tower 'E' Cuffe Parade Mumbai 400 005   Phone: 91-22-22187279/ 22189166 Fax    : 91-22-22186367 Email : gyan.mohan@sbicaps.com

Meenakshi Iyer Vice President M&A&Advisory SBI Capital Markets Ltd. 202, Maker Tower 'E' Cuffe Parade Mumbai 400 005   Phone: 91-22-22184704/ 22189166 Fax    : 91-22-22186367 Email : meenakshi.iyer@sbicaps.com

 

GoI 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 terms at any time without assigning any reason whatsoever. No financial obligation will accrue to GoI or SBICAP in such an event. Further, GoI or SBICAP or NEPA shall not be responsible for non-receipt of correspondence sent by post/courier/e-mail/fax.

 

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 ___________

 

The SVP & Group Head (M&A&A) 

SBI Capital Markets Limited   

202, Maker Tower “E” 

Cuffe Parade  

 Mumbai – 400 005

 

Sub:   EXPRESSIONS OF INTEREST FOR STRATEGIC SALE   OF  72.31% EQUITY STAKE IN NEPA LIMITED 

 

Sir,

 

This is with reference to the advertisement dated ________ inviting Expression of Interest for NEPA Limited (NEPA).

 

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 have formed/propose to form a consortium comprising ____members as follows:

 

1.         ____________________________ (Insert company name)

2.         ____________________________ (Insert company name)

3.         ____________________________ (Insert company name)

 

 

We believe 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 13^th July 2001 and subsequent amendments/clarifications thereto.

 

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 indicted 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 offence 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 GOI of the same immediately.

 

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 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 

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 ___________

 

The SVP & Group Head (M&A&A)  

SBI Capital Markets Limited   

202, Maker Tower “E”   

Cuffe Parade   

Mumbai – 400 005

 

Sub:  EXPRESSION OF INTEREST FOR STRATEGIC SALE OF 72.31% EQUITY STAKE IN NEPA LIMITED 

 

Sir,

 

This is with reference to the advertisement dated ________ inviting Expression of Interest for NEPA Limited (NEPA)

 

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.

 

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 same.*

 

We have agreed that (insert the name of the individual) has been chosen as representative of our consortium and 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 same.*

 

Yours faithfully,

 

Authorised Signatory

 For and on behalf of (party/member)

*Strike off whichever clause is not applicable

 

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)

 

§         If the interested party is a foreign company/ OCB, specify list of statutory approvals from GoI/ RBI/ FIPB applied for/ obtained/ awaiting:

 

 

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 No./fax No.	:
i)                   Registered   Office	:
ii)                 Head Office	:
9.      Address for correspondence	:

 

10.  Basis of eligibility for participation in the process (Please mention details of your eligibility) as under (whichever is applicable):

 

(a)   Brief description of manufacturing operations engaged in any sector by the interested party

(Please furnish necessary details of self/ member of consortium with manufacturing experience of 3 years or more)

 

11.  Please attach most recent Audited Statement of Accounts/Annual Report. Please provide a chartered accountant/auditor certificate certifying the Net Worth.

 

12.  Please provide details of all contingent liabilities that, if materialized, have or would reasonably be expected to have a material adverse effect 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 Person(s):

i)                   Name                    :

ii)                 Designation         :

iii)              Phone No.            :

iv)               Mobile No.          :

v)                 Fax No.                 :

vi)               Email                    :

 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 be nonetheless be set out with the words “ No response given” against it.  

 

ANNEXURE-V : GOVERNMENT CIRCULAR

 

No. 6/4/2001-DD-II

Government of India

Ministry of Disinvestment

Block 14, CGO Complex

New Delhi

     Dated 13^th 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 Expressions 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 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, 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.