Preliminary Information Memorandum (PIM)

Of

MECON Limited (MECON).

 

 

1. DISCLAIMER

 

1.      SBI Capital Markets Ltd. (“SBICAP”) has been retained as the Advisor by Government of India (GoI) for the disinvestment of 51% out of 100% Government of India’s shareholding in MECON Limited (MECON).

 

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 MECON. 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 MECON. 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 MECON, SBICAP or the Government of India (GOI) or any of their employees, advisors or agents as to or n 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 MECON. These reflect and are based on the various assumptions made by the management, officers or employees of MECON and/or SBICAP, which as well as the information on which they are based may or may not be accurate. None of GoI or MECON or SBICAP or affiliates, subsidiaries, advisors, directors, officers or employees or agents of the GoI or MECON 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 MECON. 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 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 GoI or MECON or SBICAP. MECON 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.       BRIEF PROFILE OF MECON LIMITED (MECON)

 

            2.1        INTRODUCTION

 

MECON Limited (MECON or the Company) is one of India’s leading engineering, consultancy and contracting organisation. The company has been a key engineering and consultancy arm of the Government of India. The Government of India holds 100% of the equity of the company.

 

In addition, MECON has some equity  stake in companies like Neelachal Ispat Nigam Limited (Rs. 50 million), Kudremukh Iron & Steel Company Limited (Rs. 18 million), Global Procurement Consultants Limited (Rs. 1 million) etc.

 

Principal activities of MECON are engineering, consultancy and execution of projects on “EPCC - engineering procurement construction-commissioning” basis. The turnover from sales for the year ended March 31, 2001 (provisional figures) was Rs. 2738 million.

 

The Government of India intends to disinvest 51% shareholding in MECON Limited  (MECON or the Company) to a strategic partner with transfer of management control and has appointed SBI Capital (“SBICAPs”) to be the Advisor to advise and assist the Government in managing the disinvestment process.

 

The relevant particulars of MECON Limited and the sale process are given in the Preliminary Information Memorandum (“PIM”) with the sole purpose to help interested parties to form an opinion on whether to participate in the disinvestment process of MECON by submitting an Expression of Interest (“EOI”) in the prescribed format given in Section 4 of this PIM.

 

The EOI must be submitted to SBI Capital Markets Limited (at the address provided later in this document) not later than 17.00 hrs (Indian Standard Time), 10^th May 2002.

 

            Investment Highlights

 

            The disinvestment of 51% shareholding in MECON to a strategic partner along with transfer of management control will provide an opportunity for investment in one of India’s largest engineering consultancy companies.

 

            MECON’s strengths include:

Strong international and domestic reputation as a trustworthy engineering and consultancy organisation.

Expertise in ferrous and non-ferrous metallurgical plants.

Expertise in design, engineering, procurement, construction and commissioning of coke oven plants, blast furnace complex, steel melting complex, continuous casting plants, rolling mills, bulk material handling plants.

Expertise in equipment engineering.

Multidisciplinary experienced engineering manpower.

·        Wide network of offices.

            2.2       MECON LIMITED

 

            MECON Limited (Formerly known as Metallurgical & Engineering Consultants (India) Limited), is one of the premier multi disciplinary design, engineering, consultancy and contracting organisation in the field of iron & steel, chemicals, refineries &  petrochemicals, power, roads & highways, water management, ports & harbours, gas & oil, pipelines, non ferrous, mining, general engineering and other related/ diversified areas with extensive overseas experience. MECON was set up in 1959 as Central Design & Engineering Bureau under erstwhile Hindustan Steel Limited  with an aim to reduce the dependence of foreign engineering consultants, to build indigenous capability in  design & engineering of setting up of integrated iron & steel plants in the country, to absorb & assimilate technologies available in different developed countries and adapt it to suit Indian local working conditions and to conserve foreign exchange. MECON is registered  as an autonomous company under Indian Companies Act 1956 having its head office at Ranchi, Jharkhand and functions under the administrative control of the Ministry of Steel, Government of India. The President  of India holds 100% of the equity of the company.  The authorised share capital of the company is Rs 40 million and paid up share capital is Rs 24.18 million.

 

            2.3       Business Operation

 

Since 1959, MECON is engaged in rendering design, engineering, consultancy, contracting, project management & site services for setting up of ferrous, non ferrous, oil refineries, pipelines, infrastructure, and other engineering projects. Today, its scope of service include the entire gamut of work relating to setting up of projects in green as well as brown field from concept to commissioning.

 

MECON, an ISO: 9001 registered company, has all technical disciplines including civil, structural, architecture, mechanical, metallurgical, chemical, ceramics, electrical, electronics and control system, instrumentation, environmental engineering, ocean engineering, power, computer, system, etc.

 

            Over the years the company has developed expertise in turnkey execution of projects on single point responsibility basis. It has grown in stature into a giant in the sector of engineering consultancy and project management. Its expertise in detailed engineering which is the most critical part of project execution, is formidable by any standard. In the area of project management, it accepts total responsibility for quality of work and time & cost management for successful completion of project.

 

            MECON also renders specialised services which normally engineering consultants do not provide. These are preparation of manufacturing & fabrication drawings, up-scaling of pilot plant, plant health studies, renovation modernisation & upgrading (RMU) of existing plant, engineering for plant relocation, environmental engineering & management services the implementation of ISO quality system, development of application & business software, etc.

 

 

 

2.4 Properties: Land & Buildings:

 

MECON holds several significant properties and real estate in various cities across India. A brief overview is presented below.

 

Location	Location Description of Property	Particulars
Ranchi	Engineering Office Building, Doranda	296000 Sft.
	MECON Residential Colony, Doranda	Single room hostels – 204 nos. Double room hostels – 144 nos. 400 sft.  houses – 384 nos. 600 sft. houses – 541 nos. 900 sft. houses – 503 nos. 1600 sft. & above  houses– 217 nos.   226865 sft. – other buildings like Community Centre, Hospital, School, Club, Guest House, Cooperative & others.
Bangalore	Engineering Office Building, Basavanagudi	46770 sft.
	MECON Residential Colony, Austen Town	873 sft. houses – 42 nos.
Kolkata	Transit Rest House, Lord Sinha Road	4430 sft.
Mumbai	Engineering Office Building, World Trade Centre	3640 sft.
	Engineering Office Building, Vasi, Navi Mumbai	5100 sft.
	MECON Residential Colony, Nerul	1010 sft. houses – 8 nos.
New Delhi	Engineering Office Building, Scope Minar Complex	16830 sft.
Ghaziabad	MECON Residential Colony, Kaushambi	1550 sft. houses – 4 nos. 1240 sft. houses – 8 nos.   950 sft. houses – 8 nos.
Hyderabad	Engineering Office Building, Khanij Bhavan	15700 sft.

 

             2.5       The Management and Employee Profile:

 

Board of Directors

 

Name	Description
Shri R. L. Trikha	Actg. Chairman-cum-Managing Director
Dr. S. N. Dash,	Joint Secretary, Ministry of Steel, Govt. of India
Shri R. K. Zaroo	Director (Commercial)
Shri A. Kumar	Director (Technology)
Dr. Thomas Mathew	Director, National Institute for Industrial Engineering, Mumbai
Prof. Sudas Roy	Prof. of Marketing Indian Institute of Management, Kolkata
Prof. Abad Ahmad	Prof. of Management Studies, University of Delhi, New Delhi

 

 

Employees

The profile of Employees of MECON as on  February, 2002 is given in the table below:

 

 

Description	Number
General Managers	17
Dy. General Managers	294
Asstt. General Managers	340
Sr. Managers	222
Other Executives	1192
Staff (Non-executives)	440
Total	2505

 

Voluntary Retirement Scheme:

 

 

The first VRS by the company was initiated in 1996-97. Significant number of employees have opted for the VRS. The details are given below:

 

Year	Number of employees
	Executives	Non-executives
1996	5	2
1997	24	28
1998	15	23
1999	178	49
2000	104	60
2001	1	-
2002 (till Feb’02)*	85	32
Sub-Total	412	194

 

* VRS beyond February 2002 is also under implementation

 

 

2.6        Financial Highlights:                                                                                                                            Rs. Million

Particulars	1998-99	1999-2000	2000-2001(Provisional)
Income from services rendered	2079.343	2350.386	2737.992
Other income	98.196	432.597	(-) 9.224
Total	2177.539	2782.983	2728.768
PAT	(-) 111.740	(-) 202.735	(-) 526.792
Net Fixed Assets	314.332	736.893	731.971
Cash Balance/Bank Balance	812.641	619.490	749.038

 

 

Equity base

 

The paid-up share capital of MECON stands at Rs. 24.184 million (approx. USD 0.50 million) comprising 2,418,360 equity shares of face value of Rs.10/- each held entirely by Government of India.

 

Reserves

 

MECON has a positive reserve position. As at March 31, 2001 (provisional figures) the reserves stood at Rs. 175.724 million (excluding revaluation reserve) and Rs. 561.927 million (including  revaluation reserve)

 

 

Profit After Tax: MECON had been a profit making and dividend paying company since inception till 1997 - 98. However, the company has been incurring losses since the last three years.    

                                                                 
 
Outstanding Dues: Outstanding dues as on 31^st March 2001 includes Rs. 1330.276 million recoverable from various clients ( both PSUs/ Government & private).

 

 

Detailed financials are provided below:                                      Rs. Millions

 

 

3.       SUBMISSION OF EXPRESSION OF INTEREST (EOI)

3.1 Submission of Expression of Interest

 

An advertisement has been issued in the newspapers inviting parties to submit their “Expression of Interest” (EoI) and “Request for Qualification” (RFQ) to participate in the proposed disinvestment process. A copy of the EoI & RFQ is enclosed as Section 4.

 

3.2       Format and Submission of EOI

 

            (Please also  note Eligibility criteria in Para 3.3 below)

 

1.      Expression of Interest may be submitted by Indian Companies, Firms, Overseas Corporate Bodies (OCBs), Foreign Companies (subject to such foreign companies obtaining all statutory approvals from GoI /FIPB/ RBI etc. by themselves), whether currently existing or to be formed specifically to participate in the disinvestment process, either individually or as a consortium (incorporated or unincorporated), for holding 51% equity of MECON.

 

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 EOI must be duly signed by 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:

   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 MECON

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 all the other members of the consortium.

§         Write-up on:

a)      Lead bidder

i)                   Profile of the lead bidder

ii)                 A statement of reasons for strategic interest in MECON

iii)              Any other information considered material by the lead bidder

b)     Other members

i)                   Profile of members 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 financial bid, but only with the specific permission of GOI. 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 along with the details accompanied by a processing fee towards due diligence payable by demand draft/bankers’ cheque of Rs.40,000/- drawn in favour of “Pay & Accounts Officer, Ministry of Disinvestment” payable at Delhi should be submitted not later than 1700 Hrs. (Indian Standard Time) on 10^th May 2002 in a sealed envelope superscribed “Private and Confidential – Expression of Interest for MECON” at the following address:

 

TCA Ranganathan

Senior Vice President & Head Regional Office

SBI Capital Markets Limited

5^th Floor, Ashoka Estate

Barakhamba Road

New Delhi 110 001

 

Tel. No.  91-11-3311777/3311758

Fax No.  91-11-3712894

E- Mail : tca.ranganathan@sbicaps.com

 

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. MECON/GOI/SBICAP shall not be responsible for non-receipt of correspondence.

 

Note: The processing fee of Rs.40,000/- will be refunded to the parties who do not qualify or to all the qualified parties if GOI decides to withdraw from the disinvestment process of MECON

 

 

3.3       Eligibility Criteria

Interested parties must have:

 

I.                    An annual turnover equal to or in excess of Rs.1500 million  as per the last audited accounts;

AND

 

II.         Net worth equal to or in excess of Rs.500 million as per the last audited accounts

 

2.      For a consortium bid, the Combined Turnover and the Combined Net Worth of the constituent entities of the consortium should meet the above mentioned eligibility criteria No. I and II respectively to participate in the proposed transaction.

 

3.      In case of a consortium bid, the leader of the consortium should meet at least 51% of each of the above mentioned eligibility criteria at No.I and II

 

4.      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.

 

5.      Definition

 

·        Turnover = Total turnover net of excise duty

Note: Turnover as defined herein above should not include ‘Other Income’ or any amount relating to “Change in Stock”

 

·        Net Worth = Equity Share Capital + Reserves (excluding revaluation reserves) less debit balance in the Profit & Loss Account less Miscellaneous expenses not written off

 

 

3.4       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, an interested party (ies) may be disqualified and its EOI dropped from further consideration for any of the reasons listed below:

 

Ø      Material misrepresentation by such party (ies) in the EOI and/or RFQ or otherwise.

 

Ø      Failure by such party (ies) to provide the information required to be provided in the EOI and RFQ, and

 

Ø      Submission of EOI and RFQ in respect of any party (ies), where such party (ies) 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.

           

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

 

4.      Further, Government of India 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 MECON. 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 GoI, vide its circular F.NO.4/95/2000-DD (Vol.V), has clarified regarding 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 should arise only on conviction by the Court of Law.

 

The interested party(ies) are required to read the guidelines and satisfy themselves that they are qualified to bid for the stake in MECON through the process of disinvestment and give an undertaking to the effect that they are qualified to bid for the stake in MECON 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 above, 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 MECON/GOI/SBICAP other than to provide further information on MECON. Furthermore, this document confers neither the right nor an expectation on any party to participate in the proposed disinvestment process. The MECON/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 MECON reserves the right to accept or reject any /all offer(s) without assigning any reasons.

 

3.5       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, MECON/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).  QIP will be provided with the Confidential Information Memorandum (CIM) after executing a Confidentiality Agreement and shall be invited to participate further in the process described in detail 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 hold discussions with the management of MECON/officials of Ministry of Steel and Mines / 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.

 

3.6       Enquiries

 

MECON/GOI/SBICAP 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 MECON/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 MECON/GOI/SBICAP has not responded to any question/ provided any clarification.

 

3.7       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.

 

4. ANNEXURES

 

 

ANNEXURE –I : PUBLIC ADVERTISEMENT

GOVERNMENT OF INDIA

STRATEGIC SALE OF  51%  SHAREHOLDING IN MECON LIMITED

GLOBAL  INVITATION OF EXPRESSIONS 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.

 

Government of India (GoI) holding 100% of the Equity Share capital of MECON Limited (MECON) wishes to disinvest 51% of its shareholding in MECON to a strategic partner with transfer of management control. SBI Capital Markets Ltd. (SBICAP), has been retained as the  Advisor to Government of India (GoI) for the proposed disinvestment.

 

MECON is engaged in carrying out engineering, consultancy and project management services as well as turnkey execution for mega projects. MECON’s head office is located at Ranchi in Jharkhand, India and has a wide network of offices in India.  MECON is the first engineering and consultancy organisation in India to receive ISO 9001 accreditation. For the financial year ended March 31, 2001, (Provisional figures) MECON had a turnover of Rs 2738 million (approximately USD 56 million). Further details on MECON can be accessed at the Company's website www.meconlimited.com

 

Expressions of Interest (EOIs) are invited to acquire 51% of the Equity Share capital in MECON.

 

Interested Parties should submit their Expression of Interest (EOI) along with a Request for Qualification (RFQ) and a Statement of Legal Capacity in the prescribed format not later than 1700 hrs (IST) on 10^th May 2002 at the under-mentioned address. The detailed advertisement including prescribed format for EOI/RFQ, Statement of Legal Capacity, Eligibility criteria and more information pertaining to the Company can be accessed at

www.sbicaps.com   www.divest.nic.in    or     www.nic.in/steel

 

All queries related to the EOI may be addressed to:

TCA Ranganathan

Senior Vice President & Head Regional Office

SBI Capital Markets Limited

5^th Floor, Ashoka Estate

Barakhamba Road, New Delhi 110 001

Tel. No.  91-11-3311777/3311758

Fax No.  91-11-3712894

E- Mail : www.meconlimited.com

<![endif]>

This advertisement does not constitute, and will not be deemed to constitute, any commitment on the part of MECON or GOI or SBICAP; it has been provided only by way of information on MECON. Furthermore, this advertisement confers neither the right nor an expectation on any party to participate in the proposed disinvestment.  GOI or SBICAP 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, MECON or GOI or SBICAP 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 ___________

 

 

 

To,

 

Senior Vice President & Head Regional Office

SBI Capital Markets Limited

5^th Floor, Ashoka Estate

Barakhamba Road

New Delhi 110 001

 

 

Sub: GLOBAL  INVITATION OF EXPRESSIONS OF INTEREST

FOR DISINVESTMENT OF 51% STAKE IN

MECON Limited (MECON) 

 

Sir,

 

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

 

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 of ____members as follows:

 

1.         ____________________________ (Insert name)

2.         ____________________________ (Insert name)

3.         ____________________________ (Insert 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 ___________

 

To,

Senior Vice President & Head Regional Office

SBI Capital Markets Limited

5^th Floor, Ashoka Estate

Barakhamba Road

New Delhi 110 001

 

Sub: GLOBAL  INVITATION OF EXPRESSIONS OF INTEREST

FOR DISINVESTMENT OF 51% STAKE IN

MECON Limited (MECON) 

 

Sir,

 

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

 

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 same.*

 

We have agreed that (insert the name of the individual) 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.   Salient features of financial performance for the last three years	:

 

11.  Basis of eligibility for participation in the process (Please mention details of your eligibility) as under:

Please attach most recent Audited Statement of Accounts/Annual Report. Additionally, please provide a chartered account/auditor certificate certifying the Turnover and Net Worth as defined in the Eligibility criteria.

 

12.  Please provide details of all contingent liabilities that, if materialized, 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 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.