Procedures

Bidding Procedure

Bidding Procedure to be followed by Directorate of Disinvestment, Punjab, for strategic sale in PSUs

Directorate of Disinvestment, Punjab, with a view to maintaining absolute transparency and ensuring a foolproof process removing all possibilities of tampering, will follow the bidding procedure explained below.

Activity I- Receiving the bids and Valuation Reports

Bids will be received in two separate sealed envelopes from the bidders on a specified date, time and venue.

- One envelope to contain only the price bids (first envelope)

- The other envelope (second envelope) to contain other documents: -

Inter Departmental Committee (IDC) to receive the bids, in the presence of the Global Advisors and Legal Advisors.

The second envelope to be opened and the Global Advisors and the Legal

Advisors to scrutinise these documents and certify that they are in order.

IDC to then authenticate each financial bid envelope without opening it by signing on the envelopes. Thereafter the signature of each bidder be also obtained on these envelopes. Any bidder who has come to attend this meeting but does not submit a financial bid, be also permitted to be present and his signature may also be obtained on these envelopes.

The sealed envelopes containing the financial bids thus authenticated by the IDC and the bidders be then put in a third envelope, sealed and authentication of IDC and all the bidders obtained on the third envelope, thus ensuring that no tampering can take place. Bidders to then withdraw from the meeting.

In the same meeting the Global Advisors to submit in a sealed cover the business valuation report prepared by them and the asset valuers report, to be opened by the IDC.

The Global Advisors to make a detailed presentation before the IDC on the business valuation and the asset valuation as also their recommendation of what should be the reserve price.

At this stage, the Global Advisors to withdraw from the meeting and the IDC to thereafter deliberate on the issue, if necessary in more than one session, and recommend a reserve price.

The Global Advisors not to be involved in the process of making the final recommendation of the reserve price by the IDC. Their contribution be only to provide the business valuation/asset valuation report, make a presentation and furnish any further details/clarification that the Committee may seek. Thus, the Global Advisors not to be a member of the Committee but attend its meetings as special invitees.

Activity-II- Meeting of the Core Group of Officers on Disinvestment (CGO) to consider Reserve Price and Bids.

The CGD to first deliberate on the report of the IDC and the Reserve Price recommended by the IDC. In this process the Global Advisors to also make a presentation before the CGD.

At this stage the Global Advisors to withdraw and the CGD to then recommend a Reserve Price, which could be different from that recommended by the IDC. In case of a difference of opinion, detailed reasons to be recorded in the minutes.

After the Reserve Price is decided upon by the CGD, the third envelope containing the sealed envelopes containing price bids (on which signatures of both the IDC and the bidders had been obtained during Activity-I) to be scrutinised by both the CGD and the bidders (the Global Advisors and the bidders are invited to be present at this point of time) to ensure that they have not been tampered with.

The third envelope to be then opened and the sealed envelopes containing price bids scrutinised by both the CGD and the bidders to ensure that they have not been tampered with.

Then the sealed envelopes containing the price bids (on which signatures of both the IDC and the bidders had been obtained during Activity-I) be opened and signature of the CGD and the bidders obtained on the reverse of the price bids. The signatures of the bidders be obtained to give comfort to the bidders that no tampering could take place even after this stage in the bids submitted by them. Their signatures be obtained on the reverse to ensure that none of the bidders come to know what bid the others have submitted.

Thereafter, the bidders and Global Advisors to withdraw from the meeting and the CGD to make its recommendation on whether or not to accept the highest bid in view of the Reserve Price.

Activity-III- Consideration of the bid by the Cabinet Committee on Disinvestment

Recommendations of the CGD to be thereafter placed before the CCD for final approval.

Note:- Time frame for Activity-I to Activity-III to be about a week .