Panel clears Rs 210-crore bid by Nandal Finance for Central Electronics

A ministers’ panel on disinvestment on Monday cleared a winning bid of Rs 210 crore for selling 100 per cent government equity in Central Electronics Ltd (CEL) to Nandal Finance and Leasing Pvt Ltd. The Alternative Mechanism — comprising Finance Minister Nirmala Sitharaman, Transport Minister Nitin Gadkari and Minister of State (Independent charge) for Science and Technology Jitendra Singh — approved “the highest price bid” for strategic sale of government stake in CEL.

“The next step will be to issue the Letter of Intent (LoI) and then sign the Share Purchase Agreement following which, the conditions precedent would need to be satisfied by the successful bidder, the company and Government. It is expected that the transaction will be completed during current FY 2021-22,” the Finance Ministry said in a statement.

CEL recorded sales of Rs 245.99 crore in 2019-20, as compared to Rs 232.55 crore in 2018-19, as per latest available data in company’s annual reports. It recorded net profit after tax of Rs 3.13 crore in 2019-20, up from Rs 1.69 crore in 2018-19. The company has a total debt of Rs 42.96 crore at March-end 2020, as per the annual report. The company is also carrying unpaid wage revision arrears for the year 2007 amounting to around Rs 19 crore.

Set up in 1974, CEL operates in four key areas — railway safety & signalling systems, defence (strategic) electronics, solar photovoltaics, and security surveillance solutions. Its paid up capital at March-end 2020 was Rs. 70.87 crore. This is the second strategic stake sale by the government after Air India this fiscal. After receipt of sealed financial bids, a reserve price of Rs 194 crore was fixed based on valuations by the transaction adviser and the asset valuer, the government said.