Presentation on theme: "Disinvestment of Tourism Hotels/Guest Houses of Government of Uttar Pradesh Pre-Bid Conference February 7, 2009 Lucknow."— Presentation transcript:
1 Disinvestment of Tourism Hotels/Guest Houses of Government of Uttar Pradesh Pre-Bid Conference February 7, 2009 Lucknow
2 U.P. – TOURISM POTENTIAL UP has wide diversity of Historical Places Religious attractionsCultureForests & Wild LifeOver 11.9 Crore Tourist visited Uttar Pradesh during the year 2007
3 U.P. GOVT INITIATIVES Thrust on infrastructure development Taj Expressway, Ganga ExpresswayVarious other Road ProjectsNew Airport at Kushinagar/ Greater Noida/ SaharanpurCreation of additional MW electricity generation capacity by 2012Other large initiatives for development of transport infrastructure, urban development, tourism development etc. Increased Plan size.Thrust on development under PPP mode
4 PROPOSALTo 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.
5 OBJECTIVEDevelopment and strengthening of tourism infrastructure in Public Private PartnershipRepositioning the business of existing tourist hotels/guest houses of Government of Uttar PradeshTo provide best hospitality facilities/environment to domestic/foreign tourists
6 ADVANTAGE FOR PVT. SECTOR Ready InfrastructureGood locationsLarge land area – scope for expansionClear title – Seller is State Govt.Newly formed companies – no unknown old liabilities/disputesComplete Management with InvestorGovt. to act as facilitatorInvestor Cell in Udyog Bandhu for Coordinated Action
7 SCHEME 70 Units owned by GoUP/UPSTDCL shall be disinvested These units have been grouped into 22 bundlesEach bundle will form a SPV (Public Ltd. Company)Units owned by UPSTDCL shall be demerged into SPVsAfter Demerger units owned by GoUP will be transferred to respective SPVs.The demerger process and the formation of SPVs already started
8 SCHEME… 76% of equity share of each SPV shall be disinvested 24% of equity share of each SPV shall be retained by GoUP which may be allowed to come down to 11%Employees will be offered VRS before disinvestmentRemaining employees in units will be transferred to respective SPVsTerminal Dues like Gratuity and Leave Encashment of remaining employees as on date of transfer would be funded by GoUP and kept in separate Account.
32 TAJ SHILP (SPV 22)Shilpgram Restaurant, AgraEmployees - 8
33 ELIGIBILITY CRITERIA Applicant - Companies (Individually or in Consortium with other Companies)QualificationsTechnical- 3 years experience in hospitality services- Average Annual Turnover for last three years from hospitality services –SPV NOS.AVERAGE ANNUAL TURNOVER3, 4, 5, 9, 7, 13, 10, 19, 20, 22150 LAKH1, 2, 6, 8, 11, 12, 14, 15, 16, 17, 18, 21250 LAKH
35 ELIGIBILITY CRITERIA… For ConsortiumMaximum 4 members through SPV/ MoUSpecify Lead MemberLead Member to hold- minimum 26% interest and should satisfy 51% financial capability- Technical member - minimum 26% interest andshould satisfy 51% technical capability- Other members to have atleast 10% interest each- Consortium as a whole to satisfy Financial andTechnical CapabilityFinancial and Technical Capability OF Group Companies upto 2 allowed.
36 BID PROCESS – Bank Draft/ Bank Guarantee valid for 6 months Separate Bid for each SPVEligible applicants can bid for more than one SPVsBid 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 TransactionAmount of Bid Security SPV wise:Sl. No.SPVsAmount of Bid Security per SPV (Rs. In Lakh)1.3, 5, 9, 10, 20, 222524,7,13, 195031, 2, 6, 12, 14, 15, 16,17, 18, 2110048, 11200
37 BIDDING PROCESS RFQ and RFP Documents are available for sale RFQ and RFP to be submitted in separate envelopsData Room for Due Diligence is opened at Lucknow from toTo access Data Room, Interested parties to submit :Technical & Financial capability duly certified by CAAudited Balance Sheetsto sign Non Disclosure AgreementDraft for 20000/-
38 BIDDING PROCESS…Reserve Price for 76% equity of each SPV to be announced on February 14, 2009Last date of submission of Bids February 18, 2009RFQ would be evaluated on February19, 2009Bid documents to be evaluated February 20, 2009SPV wise Financial bids to be opened February 21, 2009Financial Bid – Purchase Consideration for 76% equity of each SPVHighest financial bid above Reserve Price to be declared Successful bidderIf one Bidder is successful in respect of more than 1 SPV – Cumulative Networth requiredSuccessful bidder to be issued letter of award February 24, 2009Share sale agreement and shareholders’ agreement to be signed on sanction of demerger and transfer of units by GoUP
39 TERMS OF TRANSFER.. Lock In Period for investor’s shares– 3 years Inter se transfer amongst consortium members allowed subject to lead and member qualifying technical qualification retaining atleast 26% stakeMinimum Investment per SPV for development -25% of the financial bid of sucessful bidderFurther minimum investment can be by way of equity or loan subject to maintaining minimum Govt equity at 11% post issue.
40 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 ChairmanManaging Director to be appointed by InvestorDay to Day Management with the InvestorFurther Issue of shares on Right basis, GoUP’s option to renounce in favor its Nominee or forego that RightInvestor can pledge his shares for raising loan for Company with GoUP approvalAfter 3 years if Investor wants to sell its shareholding – first offer to GoUP & vice versa
41 TERMS OF TRANSFER… Employee Matters VRS to be given to Regular Employees by UPSTDCL before disinvestmentRemaining Employees in respective SPVs as on date of Transfer of shares to be retained by InvestorInvestor also to offer VRS to employees between 6-12 months after purchase of sharesNo adverse change in terms of employmentAdherance to Reservation Policy of GoUP
42 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 CompanyEntering 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.
43 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).
44 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