Presentation on theme: "Disinvestment of Tourism Hotels/Guest Houses of Government of Uttar Pradesh Pre-Bid Conference February 7, 2009 Lucknow Disinvestment of Tourism Hotels/Guest."— Presentation transcript:
Disinvestment of Tourism Hotels/Guest Houses of Government of Uttar Pradesh Pre-Bid Conference February 7, 2009 Lucknow Disinvestment of Tourism Hotels/Guest Houses of Government of Uttar Pradesh Pre-Bid Conference February 7, 2009 Lucknow
U.P. – TOURISM POTENTIAL UP has wide diversity of Historical Places Religious attractions Culture Forests & Wild Life Over 11.9 Crore Tourist visited Uttar Pradesh during the year 2007
U.P. GOVT INITIATIVES Thrust on infrastructure development Taj Expressway, Ganga Expressway Various other Road Projects New Airport at Kushinagar/ Greater Noida/ Saharanpur Creation of additional 12000 MW electricity generation capacity by 2012 Other large initiatives for development of transport infrastructure, urban development, tourism development etc. Increased Plan size. Thrust on development under PPP mode
PROPOSAL To seek Financial Bids from reputed Technically & Financially capable Private Investors to own 76% equity in each of the 22 SPVs containing 70 existing Hotels / Tourist guest houses owned by GoUP/ UPSTDCL for operating such units in hospitality sector on sound commercial lines.
OBJECTIVE Development and strengthening of tourism infrastructure in Public Private Partnership Repositioning the business of existing tourist hotels/guest houses of Government of Uttar Pradesh To provide best hospitality facilities/environment to domestic/foreign tourists
ADVANTAGE FOR PVT. SECTOR Ready Infrastructure Good locations Large land area – scope for expansion Clear title – Seller is State Govt. Newly formed companies – no unknown old liabilities/disputes Complete Management with Investor Govt. to act as facilitator Investor Cell in Udyog Bandhu for Coordinated Action
SCHEME 70 Units owned by G O UP/UPSTDCL shall be disinvested These units have been grouped into 22 bundles Each bundle will form a SPV (Public Ltd. Company) Units owned by UPSTDCL shall be demerged into SPVs After Demerger units owned by GoUP will be transferred to respective SPVs. The demerger process and the formation of SPVs already started
SCHEME… 76% of equity share of each SPV shall be disinvested 24% of equity share of each SPV shall be retained by G O UP which may be allowed to come down to 11% Employees will be offered VRS before disinvestment Remaining employees in units will be transferred to respective SPVs Terminal Dues like Gratuity and Leave Encashment of remaining employees as on date of transfer would be funded by GoUP and kept in separate Account.
TAJ VIRASAT (SPV 1) Rahi Tourist Bungalow, Raja Mandi, Agra Rahi Tourist Bungalow, Mathura Employees - 35
ELIGIBILITY CRITERIA… For Consortium Maximum 4 members through SPV/ MoU Specify Lead Member Lead Member to hold - minimum 26% interest and should satisfy 51% financial capability - Technical member - minimum 26% interest and should satisfy 51% technical capability - Other members to have atleast 10% interest each - Consortium as a whole to satisfy Financial and Technical Capability Financial and Technical Capability OF Group Companies upto 2 allowed.
BID PROCESS Separate Bid for each SPV Eligible applicants can bid for more than one SPVs Bid Security – Bank Draft/ Bank Guarantee valid for 6 months - Separate Bid Security for each SPV - Bid Security of highest two Bidders to be retained till completion of Transaction Amount of Bid Security SPV wise: Sl. No. SPVsAmount of Bid Security per SPV (Rs. In Lakh) 1.3, 5, 9, 10, 20, 2225 24,7,13, 1950 31, 2, 6, 12, 14, 15, 16,17, 18, 21100 48, 11200
BIDDING PROCESS RFQ and RFP Documents are available for sale RFQ and RFP to be submitted in separate envelops Data Room for Due Diligence is opened at Lucknow from 29.01.09 to 17.02.09 To access Data Room, Interested parties to submit : Technical & Financial capability duly certified by CA Audited Balance Sheets to sign Non Disclosure Agreement Draft for 20000/-
BIDDING PROCESS… Reserve Price for 76% equity of each SPV to be announced on February 14, 2009 Last date of submission of Bids February 18, 2009 RFQ would be evaluated on February19, 2009 Bid documents to be evaluated February 20, 2009 SPV wise Financial bids to be opened February 21, 2009 Financial Bid – Purchase Consideration for 76% equity of each SPV Highest financial bid above Reserve Price to be declared Successful bidder If one Bidder is successful in respect of more than 1 SPV – Cumulative Networth required Successful bidder to be issued letter of award February 24, 2009 Share sale agreement and shareholders agreement to be signed on sanction of demerger and transfer of units by GoUP
TERMS OF TRANSFER.. Lock In Period for investors shares– 3 years Inter se transfer amongst consortium members allowed subject to lead and member qualifying technical qualification retaining atleast 26% stake Minimum Investment per SPV for development -25% of the financial bid of sucessful bidder Further minimum investment can be by way of equity or loan subject to maintaining minimum Govt equity at 11% post issue.
TERMS OF TRANSFER.. Raising of loans against existing properties for development of units allowed. Two GoUP Nominee Directors on the Board of SPV including Non Executive Chairman Managing Director to be appointed by Investor Day to Day Management with the Investor Further Issue of shares on Right basis, GoUPs option to renounce in favor its Nominee or forego that Right Investor can pledge his shares for raising loan for Company with GoUP approval After 3 years if Investor wants to sell its shareholding – first offer to GoUP & vice versa
TERMS OF TRANSFER… Employee Matters VRS to be given to Regular Employees by UPSTDCL before disinvestment Remaining Employees in respective SPVs as on date of Transfer of shares to be retained by Investor Investor also to offer VRS to employees between 6- 12 months after purchase of shares No adverse change in terms of employment Adherance to Reservation Policy of GoUP
Matters requiring Prior GoUP Approval Any alteration of the Capital Structure of the Company which has the effect of reducing the Government shareholding to less than 11% of the paid up share capital. Commencement of any new line of business not related to Hospitality Services and/ or discontinue existing line of Business. Taking any steps to wind-up or terminate the corporate existence of the Company Entering into of an amalgamation, merger or consolidation with any other company or body corporate. Establishment of any subsidiary or associated company with objects other than Hospitality Services by the Company. Sale of surplus land for development of the Unit(s)/ setting up of other Hospitality/ Tourism services in the Company.
Matters requiring GoUP Nominee Directors Presence & Approval - Change in the Main Objects of the Company. –The making, directly or indirectly, of loans or advances in any Financial Year in excess of Rs.10,00,000 (Rupees Ten Lakh only) to any Person other than in the ordinary course of business of the Company. –Obtaining directly or indirectly, of loans or advances in any Financial Year in excess of Rs.200,00,000/- (Rupees Two Crore only) –The entering by the Company into any business relations or contracts (including the conclusion or termination of Agreement) having commitment exceeding Rupees One Crore with any Associate of the Investor and/or the Consortium Member(s).
Matters requiring GoUP Nominee Directors Presence & Approval… –The granting of any security or creation of any encumbrances on the assets of the Company or guaranteeing the debts or performance of any person for other than the Business of the Company. –Issue of further equity share capital