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BEML land securitised against NCDs to be part of strategic sale process

BEML land securitised against NCDs to be part of strategic sale process

The information was shared by the government to the SBI Capital Markets in response to queries raised by interested parties in BEML's proposed strategic sale

With the stake sale, management control of BEML will also be transferred to the successful bidder With the stake sale, management control of BEML will also be transferred to the successful bidder

Land assets of Bharat Earth Movers Ltd (BEML) securitised against Non-Convertible Debentures (NCDs) will also be a part of the strategic disinvestment process of the public sector unit. The information was shared by the government to the SBI Capital Markets in response to queries raised by interested parties in BEML's proposed strategic sale.  

SBI Capital Markets has been appointed as transaction advisor for managing the disinvestment process on behalf of the government. Responding to investor queries, the Department of Investment and Public Asset Management (Dipam) said, "The NCD issued by BEML is secured by operational land. The specific land will form part of the strategic disinvestment process."  

NCD issued by BEML is secured by certain land and building. The investors had sought information on whether those specific land assets will be part of disinvestment or not.  

A source close to the development told BusinessToday, "This essentially means that the land asset tied to the NCDs will also be sold to the qualified institutional party that picks up the government stake in BEML. Also, the QIP will have to honour the BEML's commitment towards the NCD holders."

The total outstanding principal towards the NCDs is to the tune of Rs 300 crore as on March 2020. The NCDs carry a rate of interest of 9.24% and have a staggered maturity till 2022-23.   

Dipam invited expressions of interest (EoI) to offload its 26 per cent stake in BEML - the government-run defence and construction equipment manufacturer. The government currently holds 54.03 per cent stake in BEML Ltd. With the stake sale, management control of BEML will also be transferred to the successful bidder. BEML EoI was invited in January this year and the deadline for submission of EoI is March 1.

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