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Balmer Lawrie to have 2-year lock-in post divestment

Govt has said after two years of Balmer Lawrie disinvestment, the buyer would be free to sell the assets of the firm.

business Updated: Sep 17, 2003 19:08 IST

The Union government has fixed the lock-in period of two years for Balmer Lawrie & Company post disinvestment, following which the buyer would be free to sell the assets of the firm.

As per the share purchase agreement (SPA) finalised by the Core Group of Secretaries, the government has decided to fix a two-year lock-in period within which the buyer would not be able to sell the company's assets after signing the transaction document, sources said.

Sources said that while in other cases of disinvestment, lock-in periods had been given for a maximum of five years, it was not clear why the government chose to fix a two-year lock-in period for Balmer Lawrie, a company having assets spread all across country.

The SPA also had clauses relating to employee protection, sources said, adding that the buyer would not be allowed to retrench any employee within one year of acquisition of the company's shares. The current employee strength of Balmer Lawrie is around 1600.

They said once the CCD gave its approval, the government would invite financial bids from the four intending buyers, which are Patton International, Uttam Galvanising, Sound Craft and Israeli firm Zim Lines.

Sources said that it is unlikely that the Supreme Court ruling halting the disinvestment process of HPCL and BPCL would have any impact on Balmer Lawrie as the formation of the company was an administrative decision and not formed by any act of Parliament.

First Published: Sep 17, 2003 19:08 IST