IDCOL CEMENT LIMITED 

PRELIMINARY INFORMATION MEMORANDUM

November 2002

Deloitte Touche Tohmatsu India Private Limited

LIMITATIONS AND DISCLAIMERS

 1.         This document is being provided in connection with the proposed disinvestment of 86.79% equity by the Government of Orissa (hereinafter referred to as “GoO”), held through Industrial Development Corporation Orissa Limited (hereinafter referred to as “ IDCOL”)  in IDCOL Cement Limited (hereinafter referred to as “ICL”).

 2.        Deloitte Touche Tohmatsu India Private Limited (herein after referred to as “Deloitte”) has been appointed as the Advisors for the disinvestment by GoO.

 3.        The sole purpose of this document is to assist the recipient in deciding whether they wish to proceed with further investigation of the proposed transaction, but is not intended to form the basis of any investment decision or any decision to purchase the equity offered for sale by GoO.  This document does not constitute nor should it be interpreted as an offer or invitation for the sale or purchase of securities described herein.

 4.        This document is meant to provide information only and upon the express understanding that recipients will use it only for the purposes set out above.  It does not purport to be all-inclusive or contain all the information about ICL or be the basis of any contract.  No representation or warranty, expressed or implied, is or will be made as to the reliability, accuracy or the completeness of any of the information contained herein. It should not be assumed that there shall be no deviation or change in any of the herein mentioned information on ICL.  While this document has been prepared in good faith, neither IDCOL nor ICL nor GoO nor Deloitte nor any of their respective officers or employees make any representation or warranty or shall have any responsibility or liability whatsoever in respect of any statements made or omissions herefrom.  Any liability is accordingly expressly disclaimed by ICL, IDCOL, GoO, Deloitte and any of their respective officers or employees even if any loss or damage is caused by any act or omission on the part of ICL, IDCOL, GoO, Deloitte or any of their respective officers or employees, whether negligent or otherwise.

5.         By acceptance of this document, the recipient agrees that any information herein will be superseded by any later written information on the same subject made available to the recipient by or on behalf of ICL, IDCOL and GoO. GoO, Deloitte, ICL, IDCOL and any of their respective officers or employees undertake no obligation, among others, to provide the recipient with access to any additional information or to update this document or to correct any inaccuracies herein which may become apparent, and they reserve the right, at any time and without advance notice, to change the procedure for the sale of all or any part of the Interest or terminate negotiations or the due diligence process prior to the signing of any binding purchase agreement.

6.         Accordingly, interested recipients should carry out an independent assessment and analysis of ICL and of the information and observations contained herein.

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

CONTENTS

 

Section	Title	Page no.
Part A	Submission of Expression of Interest (EoI)	3
Part B	IDCOL Cement Limited	9
	Annexure 1 – A copy of the Advertisement	17
	Annexure 2 – Expression of Interest	18
	Annexure 3 – Statement of Legal Capacity	20
	Annexure 4 – Request for Qualification	21
	Annexure 5 – Guidelines for Qualification of Bidders	22

 

           A.                  SUBMISSION OF EXPRESSION OF INTEREST (EOI)

 1.                   INTRODUCTION

 1.1       The Government of Orissa (“GoO”) intends to disinvest its entire equity shareholding (86.79%) in IDCOL Cement Limited (“ICL” or the “Company”) along with transfer of management through a strategic sale held through Department of Public Enterprises (DPE), Government of Orissa and Industrial Development Corporation of Orissa Limited (IDCOL).

 1.2       Deloitte Touche Tohmatsu India Private Limited (“Deloitte”) has been appointed as the Advisors for the disinvestment by the GoO.

 2.         ADVERTISEMENT INVITING EOI

 An advertisement has been issued in leading business and other publications inviting interested parties to submit their ‘Expressions of Interest’ (“EoI”) to participate in the disinvestment process, a copy of which is enclosed as Annexure-I.

 3.         EXPRESSION OF INTEREST

              The process of participating in the disinvestment process and the requirements relating to information to be provided by interested parties when submitting their EoI is set out in the ensuing sections. 

 4.         ELIGIBILITY/ PRE-QUALIFICATION CRITERIA 

4.1       The interested party(ies)/consortium should have a combined net worth in excess of Rs. 800 million as well as sales turnover in excess of Rs. 1000 million as per the annual accounts of financial year 2001-02. The definition of networth and sales for the purpose of the qualifying criteria are set out below:

 

Definitions 

Ø      Net Worth

 Net Worth = Equity Share Capital + Reserves & Surplus (excluding Revaluation Reserves)

 As per Part I of Schedule VI of the Companies Act, 1956

 Ø      Sales

 Sales = Sales including subsidies (if any) and net of any taxes and duties levied, such as excise duty, sales tax, etc., if any.

 Where sales in the Balance Sheet is inclusive of any taxes and duties, a statement showing sales net of such levies need be provided.  

4.2       In case of a consortium bid, the financial parameters of the lead bidder must be at least 51.00% of the amount indicated in para 4.1 above.

 

4.3        Where the financial statements are expressed in currency other than the Indian Rupee, the eligible amount as described above shall be computed by taking the equivalent US Dollars at the exchange rates (as stipulated by State Bank of India’s) prevailing on the date(s) of such financial statements.

 4.4       This Preliminary Information Memorandum (“PIM”) along with its enclosures does not constitute any commitment on the part of the GoO or ICL or IDCOL or Deloitte, whether in respect of the disinvestment process or otherwise.  Furthermore, this invitation confers neither any right nor expectation to any party to participate in the said process.

 4.5        GoO and IDCOL 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 any terms at any time without assigning any reason whatsoever.  No financial obligation whatsoever shall accrue to the GoO or ICL or IDCOL or Deloitte in such an event.

 5.          INITIAL PROCESS

 5.1        Following receipt of this PIM, interested parties will be required to submit an EoI Package comprising an Expression of Interest, a Statement of Legal Capacity and a Request for Qualification in formats specified in Annexures II, III, and IV.

 5.2        Based on an evaluation of the EoI Package received, interested parties which are deemed to be qualified by the GoO (“Qualified Interested Parties” or “QIPs”) will be allowed to participate in the subsequent selection process (without conferring any right or expectation whatsoever to the QIPs).

 5.3        Following signing of a Confidentiality Undertaking (“CU”) by duly authorised personnel, QIPs will be provided with the Bid Packet comprising the Confidential Information Memorandum (“CIM”) and the Request for Proposal (“RFP”) and will be invited to participate further in the process as detailed in the RFP.

 6.          FILING REQUIREMENTS

 6.1        Interested parties must submit, in duplicate, their EoI accompanied by a Statement of Legal Capacity and Request for Qualification (“RFQ”) the “EoI Package”, as per the formats given in Annexures II, III & IV of this PIM.

 6.2        EoIs must be signed by a duly authorised representative of the interested party.  In the case of a consortium or joint venture the EoI must be signed by a duly authorised representative for the group.  In addition, Statements of Legal Capacity and RFQs have to be submitted by interested parties and each member of any consortium or joint venture.  This comprises the EoI Package.

 6.3        All EoI Packages must be in English and each copy shall be bound in a separate volume.  Submission of the aforesaid documents by fax, e-mail or other electronic means will not be acceptable.  It is the responsibility of the interested party(ies) alone to ensure that its EoI with required documents is delivered at the address given below by the stated time and date.  The covering envelope containing the aforesaid document should be clearly marked “Expression of Interest – IDCOL CEMENT LIMITED”.  Neither the GoO nor ICL nor Deloitte shall be responsible for non-receipt of correspondence.

 6.4               The EoI Package must be submitted by no later than 17.00 hours (Indian Standard Time) on 16^th December 2002 at the following address

 

The Director Deloitte Touche Tohmatsu India Private Limited 14th Floor, Dr. Gopal Das Bhawan 28, Barakhamba Road New Delhi 110 001.

      

7.          EOI FILED BY CONSORTIA/JOINT VENTURES

 7.1               If a Consortium or Joint Venture is formed, or proposed to be formed, specifically for the purpose of this investment, details of the members of the Consortium or Joint Venture and the extent of their interest herein must be provided in the EoI Package.

 7.2               In case of a Consortium or a Joint Venture, there will be a lead bidder, which will acquire not less than 51.00% of the total equity disinvested. 

7.3        Any change by way of withdrawal/substitution/inclusion of any member of the consortium/joint venture or any change affecting the composition of the consortium may be permitted prior to the stage of submission of financial bid, but only with the specific approval of GoO. GoO or ICL or IDCOL or Deloitte have the sole discretion to determine the impact of the change in membership on the quality of the consortium and reject a proposal for such reason.

              The RFQ should be duly filled in and accompanied by the following details:

 Ø      In case of a sole bidder

 

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

 

Ä      Write-up on:

·          Profile of the sole bidder

·          A statement of reasons for strategic interest in ICL

·          Any other information considered material

 

Ø      In case of a consortium bid

 

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

 

Ä      Write-up on:

 

·          Lead bidder

 

o      Profile of the lead bidder

o      A statement of reasons for strategic interest in ICL

o      Any other information considered material by the lead bidder

 

·          Other member companies

 

o      Profile of member companies in the consortium

o      Any other information considered material

 8.          DISQUALIFICATION

 8.1        GoO shall not consider for the purpose of qualification, an EoI which is found to be incomplete in content and/or attachments and/or authentication, etc.

 8.2        Without prejudice to any other rights or remedies available to GoO, a company/consortium/joint venture may be disqualified and its EoI dropped from further consideration for any reason whatsoever including those listed below:

 Ø      Material misrepresentation by such company/any member of such consortium/joint venture whether, in the EoI along with the RFQ or otherwise.

 Ø      Failure by such company/consortium/joint venture to provide the information required to be provided in the EoI, along with the RFQ, pursuant to relevant sections of the PIM.

 Ø      Submission of an EoI along with RFQ in respect of any company/consortium/joint venture, where such company or any member of such consortium/ joint venture which has already submitted an EoI.

 8.3        If information becomes known which would have entitled GoO to reject or disqualify the relevant company/ consortium/ joint venture, even after the interested party has been qualified to receive the Bid Packet, GoO reserves the right to reject the interested party at the time, or at any time after, such information becomes known to GoO. 

8.4       Where the interested party is a consortium/ joint venture, GoO may disqualify the entire consortium/ joint venture for any of the reasons set out above, even if it applied to only one member of the consortium/ joint venture. 

8.5       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 13 July, 2001, a copy of which is enclosed as Annexure-V.  The interested party(ies) are required to read the guidelines and satisfy themselves that they are qualified to bid for the stake in ICL through the process of disinvestment and give an undertaking to the effect that they are qualified to bid for the stake in ICL in the Expression of Interest to be submitted by them.  Interested parties would be required to provide the information on the criteria laid down in the guidelines of 13 July 2001 along with their Expression of Interest.  The Interested parties 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 GoO.  For other criteria also, a similar undertaking shall be provided along with EoI.

 8.6       The company/consortium/joint venture not satisfying the eligibility and requisite qualification criteria specified in the above sections is not eligible.

  9.        FUTURE PROCESS

 9.1        Based on the EoI submitted by the interested parties, GoO, advised by Deloitte will carry out an evaluation of the qualification of such interested parties. If at any time during the evaluation process, GoO or Deloitte requires any clarification in order to carry out the evaluation, it reserves the right to request such information from any or all of the companies/ consortium/ joint ventures and the companies/ consortium/ joint venture will be obliged to respond to any reasonable request for such information and to supply the same to Deloitte within such reasonable timeframe as GoO or Deloitte may require.

 9.2       Based on an evaluation of EoIs received, interested parties, which are deemed fit (“Qualified Interested Parties” “QIP”) will be invited to participate in the subsequent selection process (without conferring any right or expectation whatsoever to QIPs).  QIPs will be provided with the Request For Proposal (RFP) and the Confidential Information Memorandum (CIM) and shall be invited to participate further in the process described in detail in the RFP.  QIPs will get an opportunity to conduct a due diligence and take up plant visits and will also have access to data rooms and hold discussions with the management of ICL/IDCOL / officials of GoO.  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.

 9.3       This document constitutes no form of commitment on the part of GoO or ICL other than to provide further information on ICL.  Furthermore, this document confers neither the right nor an expectation on any party to participate in the proposed disinvestment process.  GoO and ICL reserve the right to withdraw from the process or any part thereof or vary any terms at any time without assigning any reasons.  GoO reserves the right to accept or reject any/all offer(s) without assigning any reasons.

 10.       ENQUIRIES

 10.1     GoO and Deloitte reserve the right, in their sole discretion, not to respond to any questions raised or provide clarification sought, if it is considered that it would be inappropriate to do so. Nothing in this section shall be taken or read as compelling or requiring GoO and Deloitte 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 GoO and Deloitte has not responded to any question/ provided any clarification. 

11.       GOVERNING LAWS/ JURISDICTION/ ARBITRATION

 11.1     All matters relating to the divestment process and biding procedure shall be governed by the legal proceedings under Indian Arbitration & Conciliation Act 1956 and the laws of Union of India and shall be cogniable and trable only in the appropriate Courts at Bhubaneswar exercising territorial jurisdiction over the subject matter and no other Courts shall have jurisdiction to entertain the matter. In case of Arbitration, the Arbitration shall be nominated by the parties to the agreement after mutual discussion.  

B.           IDCOL CEMENT LIMITED

Name	:	IDCOL CEMENT LIMITED
Registered Office	:	Cement Nagar, Bardol – 768 038 (District Baragarh) Orissa, India
Year of incorporation	:	1993

 1.         HISTORY

 1.1               Formation

 IDCOL Cement Limited (ICL) was incorporated in 1993 as a subsidiary of Industrial Development Corporation Orissa Limited (IDCOL), to take over the erstwhile Hira Cement Works, established in 1968, then a division of IDCOL. ICL is a government company as per the definition of Companies Act 1956 having its registered office at Cement Nagar, Bardol, in the district of Baragarh, Orissa. 

1.2               Shareholding Pattern

 The shareholding pattern of ICL as at 31 March 2002 is set out below: 

Particulars	Amount (Rs. in million)	Percentage
90,000,000 equity shares of Rs.10 each fully paid by IDCOL, the holding company	900.0
Advance against share capital. 115,131,841 equity shares of Rs.10 each by IDCOL	1,151.3
Shareholding of IDCOL	2,051.3	85.42
35000000 equity shares of Rs.10 each fully paid, held by Unit Trust of India (UTI)	350.0
Shareholding of UTI	350.0	14.58
Total	2401.3	100.00

 

However, the above share holding in ICL has undergone a change with IDCOL and GoO converting most of its loan into equity. The latest share holding in ICL as on 31^st October 2002 is mentioned below;

Particulars	Amount (Rs. in million)	Percentage
23,00,00,070 equity shares of Rs.10 each fully paid by IDCOL, the holding company	2300.0
Shareholding of IDCOL	2300.0	86.79
35000000 equity shares of Rs.10 each fully paid, held by UTI	350.0
Shareholding of UTI	350.0	13.21
Total	2650.0	100.00

2.          PRODUCT PROFILE

 The details of the products manufactured by ICL are set out

Product	Grade
Ordinary Portland Cement	33
Ordinary Portland Cement	43
Portland Slag Cement	-

In addition, ICL has obtained licence to produce Portland Pozzolana Cement (PPC).

 3.          SALES AND MARKETING 

The sales break-up of ICL for the year ended 31 March, 2002 is set out below:

Product	Sales
	(in MT)	(in Rs Millions)
Ordinary Portland Cement	2,18,687.65	500.12
Portland Slag Cement	4,79,295.55	1090.79
Total	6,97,983.20	1590.91

            The products are sold under the brand name of ‘IDCOL Cement’ and have a market share of 0.68% nationally. The cement is predominantly sold in Orissa and other East Indian states, where its market share varies from 20% to 22%.

 In terms of share of cement market, ICL enjoys a healthy market share of over 25% in Orissa while in West Bengal, it has a 5% share of the market. Further, ICL in its drive to expand markets has entered into neighboring states of Andhra Pradesh, Chatisgarh, Bihar and North-Eastern states, where the current focus is on developing a reliable dealer network.

 The customers of ICL can be bifurcated into two broad types - trade and non-trade. The trade customers are serviced through a well-organized dealers network while the non-trade customers are supplied directly following success in open tender offer.

 The sales and marketing of ICL is organised into two main divisions as set out below:

Ø      Field Sales Organisation, which operates through a number of zones, and

Ø      Office Organisation, which is entirely based at Baragarh.

 Currenly, the Field Sales Organisation is divided into six zones i.e. 4 in Orissa, 1 in West Bengal and 1 in Ranchi headed by Zonal Managers, which is then divided into 12 Branch Offices headed by Branch Managers.

 ICL has a total of 27 Depots, 16 in Orissa, 5 in West Bengal and 6 in Jharkhand, from where Dealers lift their requirements and 500 dealers. Cement from ICL is transported to these Depots through transport contractors.

 4.                   MANUFACTURING FACILITIES

 4.1       Manufacturing Facilities  

The installed capacity of ICL is 0.96 million metric tones per annum based on dry technology.

 The ICL cement plant in Bargarh is a modern facility, firmly based on high-quality raw materials and the latest technology available to the manufacturers in 1990s.   

 The limestone presently available from the quarry has a chemical composition that enables it to satisfy the raw mix requirements with only small addition of other ingredients (sweetener, iron ore).  Low alkali content contributes to the product quality, as well as largely preventing potential problems with the preheater operation.

 The raw mill - kiln system, manufactured or designed by F.L. Smidth-Fuller Engineering Group (Denmark-USA), is among those recognised as the best in the world.  The system presently exceeds the design capacity and operates with a satisfactory degree of fuel economy.   The closed-circuit finish grinding system with roller presses (HPGR) helps to save electric power demand for grinding cement, which is usually the most energy-intensive part of the cement manufacturing process.

 The major innovation, implemented in the plant process design, is separate grinding of clinker and slag with subsequent blending.  This permits improvement in performance of Portland slag cement through better control of particle size distribution.  The success of this approach can be seen, when cements produced by this process are compared with those made in the old ball mills.

 Another salient feature of the plant design is pre-homogenisation of coal by means of a stacker-reclaimer.  This measure helps to alleviate adverse affects of the typical fluctuations of the coal characteristics, especially of the ash content. 

Use of high-alumina refractory lining for the kiln-burning zone instead of more customary magnesia brick is also uncommon.  The operating staff are apparently satisfied with their durability (reportedly, 12 to 16 months between repairs). The price factor also favours this material.

 The quality of knowledge and practical experience of the company’s technical personnel is impressive. Major equipment at the plant and the suppliers is in the table below:

 

Equipment	Supplier	Capacity (tonne/hour)
Primary (jaw) crusher (two installed)	F.L.Smidth	2 x 150
Secondary (impact) crusher	L&T	300
Vertical roller mill	Fuller	170
Pyroprocessing system: preheater, precalciner, kiln, cooler	F.L.Smidth	75
Coal mill	Fuller	21
Slag  dryer	KCP	30
Slag roller press with classifier	Fuller	60
Clinker roller press with classifier	Fuller	90
Finish mill	KCP	90
Finish mill (old)
Packing house (3 machines)

  4.2               Limestone

 ICL operates two limestone mines at Dungri and Beherabanjipali under lease from the State Government. The Dungri Limestone quarry is situated at 43 Kms from the plant site and it is connected to the plant through a broad gauge railway line. ICL owns and operates the transport infrastructure. Beherabanjipali is also situated near the same railway line. At present the IDCOL holds the leases and these are in the process of transfer to ICL. The necessary process has been initiated. These mines are for sole use by ICL and the reserves at each of the two mines is

Mine	Proven reserve ( millions MT)	Distance from processing plant
Dungri	27.00	43 km by Meter Gauge rail or 50 km by road
Beherabanjipali	2.97	33 km by Meter Gauge rail or 44 km by road

 4.3               Power

 ICL sources its power requirement from the grid and it falls under WESCO, the privatized distribution company operating in western Orissa. ICL has a contract demand of 17 MVA having its own 132/11 kV sub-station within the factory premises. In addition, there is a 250 kVA DG set that is used to rotate klin in case of power failure.

 4.4               Personnel

ICL has around 813 people in all categories both in the factory and the mines. It is headed by an Executive Director. Besides, there are some contract labourers at the Dungri mines and at the works.

 The company has a record of good labour relations and up until now no mandays at the factory have been lost due to labour related problems.

 4.5               Land Details

 ICL has in its possession 1,121.67 acres of land as per following details

S.No	Particulars	Area in Acre
1	Private Land (through acquisition)	451.85
2	Private Land (through purchase)	129.40
3	Government Land (through alienation)	488.45
4	Reserve Forest Land	51.97
	Total	1,121.67

 4.6               ISO (International Organization for Standardization) Certification 

ICL was accredited with ISO-9002 certificate by TUV India Private Limited in the year 1998 for a period of three years which has been successfully renewed.

 4.4       Other Facilities

 The table below describes briefly other facilities available at ICL.

Location	Description	Comments
Plant	Cement Nagar English Medium School	Totally owned by company.  Financial assistance from company of Rs 8,900 per month (p.m.).
Plant	Cement Nagar English Medium School	Now under permissive possession of Education Department GoO
Plant	E.S.I. Hospital	Company owns land on which the Hospiatl & Staff quarters have been built
Plant	Residential housing	For most employees (although not part of contract of employment.)  Nominal rent.
Plant	Quarters for ESI staff, Bank staff, Central Excise staff, School staff, Market complex, etc	Income of about Rs 6,000 p.m. including water charges.
Mines	Swami Vivekanada College, Dungri	Rs 10,000 p.m. given by company
Mines	Mahanadi High School, Banjipali	Rs 6,000 p.m. given by company
Mines	English Medium School – located inside the colony	Rs 4,000 p.m. given by company
Mines	DLQ Colony UP School	Started in 1979 on Corporation Land – subsequently taken over by the Government
Mines	Dispensary.  Quarters provided to Post Office, Bank,.  Housing quarters for contract staff.	Dispensary entirely run by company.  Bank, Post office etc pay nominal rent of Rs 1,000 p.m.  Contractors pay Rs 7,716 p.m.

4.5       Strengths of ICL

 Ø       The mines are having adequate deposits, which can run around another 25 to 30 years.

Ø      The quality of limestone is satisfactory. Total carbon (TC) content of the mines comes to 80% after blending various deposits. This apart, the ore contains low degree of Sillica and MgO.

Ø      Moreover, ICL has another mine of enriched limestone (TC content around 90%) which is being added as the sweetener to the extent of 8 to 10% to augment the productivity and nullify the effect of silica arising out of the high ash content of the coal.

Ø      The plant output and efficiencies can be enhanced by replacing/upgrading some of the machinery and equipments and by adding balancing equipments.

 5.                   FINANCIAL PERFORMANCE

 5.1               Financial Statements

 An abstract of the financial statements of ICL for the past five years is presented in the following tables:

 

 

 ANNEXURE 1

 

GOVERNMENT OF ORISSA

INVITATION FOR “EXPRESSION OF INTEREST” FOR STRATEGIC SALE OF IDCOL’s HOLDING IN

IDCOL CEMENT LIMITED 

This announcement is neither a prospectus nor an offer or invitation to the public for sale of securities

 Government of Orissa (GoO) intends to disinvest 86.79% of the equity in IDCOL Cement Limited (ICL), held by Industrial Development Corporation Orissa Limited (IDCOL), a GoO owned entity, in favour of a strategic investor. Adam Smith Institute is advisor to GoO for Public Enterprise Reforms Programme in the State of Orissa.

 Deloitte Touche Tohmatsu India Private Limited (Deloitte) has been appointed as advisors to assist the GoO in inducting the Strategic Partner for ICL.

 IDCOL Cement Limited (ICL) is predominantly in the business of manufacturing and selling cement for which it has a manufacturing facility at Bardol (District Baragarh), Orissa, India with a capacity of 0.96 million Metric Tonnes per annum. For sourcing raw material, the company operates two lime stone quarries located at Dungri and Beharabanjipali under long term lease agreement. The company has a record of good labour relations and its brand is well recognised as a quality product.

 Additional information on ICL, including the copy of the Preliminary Information Memorandum (PIM) can either be accessed at the website www.idcorissa.com or www.orissagov.nic.in/pe/pe.htm  can be obtained from Deloitte Touche Tohmatsu India Private Limited, 14 Floor, Dr. Gopaldas Bhawan, 28 Barakhamba Road, New Delhi 110 001, India.

 Interested party (ies), either individually or as a consortium, may submit their Expression of Interest (EoI) along with a Request for Qualification (RFQ) and other related documents in the format specified for the purpose in the PIM so as to reach the designated official specified in the PIM before 17:00 hours (Indian Standard Time) on 16^th December, 2002. 

This announcement is neither a prospectus nor an offer or invitation for sale of equity shares or any securities to any institution/public. The GoO as well as ICL,IDCOL reserves 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 any terms at any time without assigning any reason whatsoever. No financial obligation whatsoever shall accrue to GoO or ICL or Deloitte, in such an event. Neither GoO, nor ICL nor Deloitte shall be responsible for non-receipt of correspondence sent by post/courier/e-mail/fax.

                                                         ANNEXURE II

EXPRESSION OF INTEREST (‘EOI’)

 (To be forwarded on the letterhead of the interested parties/members of the consortium/joint venture submitting the EoI).

  Ref: _________                                                                                    Date: _________

  The Director

Deloitte Touche Tohmatsu India Private Limited

14^th Floor, Dr. Gopal Das Bhawan

28, Barakhamba Road

New Delhi  - 110 001

             

 Sir,

 Sub:     EXPRESSION OF INTEREST FOR STRATEGIC SALE OF SHAREHOLDING

IN IDCOL CEMENT LIMITED

 We refer to the advertisement dated____________ inviting Expression of Interest for IDCOL Cement Limited.

 

We have read and understood the contents of Preliminary Information Memorandum (PIM) and the advertisement and wish to participate in the above disinvestment process.

 * We propose to submit our EoI in an individual capacity for and on behalf of (insert company name)

 * We have formed / propose to form a consortium/joint venture comprising the following members:

 1.          __________________(Insert company name)

2.          __________________(Insert company name)

3.          __________________(Insert company name)

 

We confirm that we/our consortium/joint venture/proposed consortium / proposed joint venture* satisfy the eligibility criteria set out in the 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.  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 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 convicted by a court of Law for any offence committed by us or by any of our sister concerns and no charge sheet has been filed by any agency of the Government 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.

 The request of Qualification as per format duly signed by us/respective members, who jointly satisfy the eligibility criteria, is enclosed.

 We shall be glad to receive further communication on this subject.

Yours faithfully,

 

 

Authorised Signatory

For and on behalf of

* strike off whichever is not applicable.

 

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 and /or each member of the consortium/ joint venture submitting the EoI).

 Ref: _________                                                                                   Date: _________

 

 The Director

Deloitte Touche Tohmatsu India Private Limited

14^th Floor, Dr. Gopal Das Bhawan

28, Barakhamba Road

New Delhi  - 110 001

             

 Sir,

 Sub:     EXPRESSION OF INTEREST FOR STRATEGIC SALE OF SHAREHOLDING

IN THE IDCOL CEMENT LIMITED

 We refer to the advertisement dated________of the Government of Orissa (GoO) and the Preliminary Information Memorandum (PIM) in connection with the proposed disinvestment of IDCOL Cement Limited (ICL).

 

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 individual’s name) will act as our representatives on our behalf and has been duly authorised to submit the EoI. Further, the authorised 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 authorised to submit the EoI.   Further, the authorised 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

* strike off whichever is not applicable.

                                                                

ANNEXURE-IV

 REQUEST FOR QUALIFICATION (“RFQ”)

 (To be submitted in the respect of the interested parties/ each member of the consortium/ joint venture).

 Name of the interested Party (ies)/Member (s): ____________________

 

Constitution (Check, where applicable)		Sector (Check, where applicable)
·         Public Limited Company	q	·         Public sector	q
·         Private Limited Company	q	·         Joint sector	q
·         Co-operative Societies	q	·         Private sector	q
·         Others, if any	q
·         If others, please specify

 

Nature of business	:
Date of incorporation	:
Date of commencement of business	:
Full address including telephone numbers/fax	:
Registered office	:
Head office	:
Address for correspondence	:

 

Basis of eligibility for participating in the proposed disinvestment in the ICL: (Please mention details of your eligibility as per the PIM requirements)

 

(Please attach supporting documents including the latest Certified Provisional/ Audited/ Unaudited Statement of Accounts and Annual Reports for the last 3 years).

 Contact Persons:

 

Yours faithfully,

Authorised Signatory

For and on behalf of

Place:

Date:

 

ANNEXURE-V

 

No. 6/4/2001-DD-II

Government of India

Department of Disinvestment
Block 14, CGO Complex
New Delhi.
Dated 13^th July, 2001.

OFFICE MEMORANDUM  

Subject: 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.

 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.

(A.K. Tewari)

Under Secretary to the Government of India.

NOTE:

 

The following would be treated as grave offence:

 

(i)  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.

 

(ii) 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.

 (iii) Any conviction by a Court of Law.

 (iv) In cases in which SEBI also passes a prosecution order, disqualification of the bidder should arise only on conviction by the Court of Law.