Content area
Full text
PREMARKETING for an up to $800m privatisation of Indian fixed line operator Mahanagar Telephone Nigam Ltd (MTNL) began in earnest this week despite the failure of a similarly ambitious offering by the Gas Authority of India (Gail) to come to the market as expected.
Reflecting the government's determination to bridge its budget deficit with privatisation receipts, MTNL's roughly 100m share offering has been kept to its original launch schedule.
However, lead bankers Goldman Sachs, HSBC and Merrill Lynch said the government divestment commission will only make a final decision on formal launch following the completion of premarketing at the end of next week.
Bankers shrugged off the demise of Gail's roughly $700m share sale. As one put it: "Obviously we are disappointed that the issue wasn't completed, but there is definitely a positive side to the postponement, which will feed through into additional orders for MTNL."
Gail's failure divided specialists, some of whom believed that India's relative immunity to the Asian currency crisis and the fundamental strengths of the company would see it through to completion. Others expressed little surprise at the deal's demise given the uncertain direction of the rupee and the overweight positions in the subcontinent of many funds.
Formal postponement of Gail by the three global co-ordinators BZW, Jardine Fleming and Morgan Stanley - was decided on Wednesday, the 150m share deal's pricing date.
The company conducted...