Centre to sell its entire stake in Dredging Corporation

Centre to sell its entire stake in Dredging Corporation

News:

1. The Cabinet Committee on Economic Affairs (CCEA) has approved divestment of its entire 73.44 percent stake in Dredging Corporation of India to a consortium of four ports.

Important Facts:

2. The consortium of four ports are namely Vishakhapatnam Port Trust, Paradeep Port Trust, Jawahar Lal Nehru Port Trust and Kandla Port Trust.

3. The government holds 73.44% shares in DCIL valued at a little over ₹700 crore as per current market prices of the share.

4. The strategic disinvestment of DCIL shall be undertaken after conducting due diligence exercise by both the entities with the help of advisors appointed for the transaction.

5. Background: The government’s divestment target for the fiscal was Rs 80,000 crore and so far it has garnered over Rs 15,000 crore from PSU stake sales.

6. Impact:

• The approval will further facilitate the linkage of dredging activities with the ports, keeping in view the role of the DCIL in expansion of dredging activity in the country
• It has also the potential scope for diversification of ports into third party dredging.
• The co-sharing of facilities between the company as well as ports will lead to savings for ports.

This would further provide opportunities for larger investment in DCIL as integration with ports shall help in effective vertical linkage in the value chain.