Lok Sabha Question No. 2931 (UNSTARRED), answered on 2023-08-07
Subject: Privatisation of HLL Life Care Ltd.
Ministry: FINANCE
Asked by: N.K. Premachandran

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF INVESTMENT AND PUBLIC ASSET MANAGEMENT

## LOK SABHA

## UNSTARRED QUESTION NO. 2931

TO BE ANSWERED ON MONDAY, AUGUST 7, 2023 SRAVANA 16, 1945 (SAKA)

## PRIVATISATION OF HLL LIFECARE LIMITED

## 2931.   SHRI N.K. PREMACHANDRAN

Will the Minister of FINANCE be pleased to state :

- (a) whether the Government proposes to privatise the HLL Life Care Ltd. ;
- (b) if so, the details thereof ;
- (c) the details of action taken by the Government for the privatisation of HLL ;
- (d) whether  the  Government  proposes  to  consider  the  request  of  stakeholders  to  stop  the privatisation process, if so, the details thereof and the action taken thereon;
- (e) whether the Union Government has received any request from the State Government of Kerala to hand over HLL Limited, if so, the details thereof and the action taken thereon ;
- (f) whether  the  Union  Government  restricted  Kerala  to  take  part  in  the  bid  process  for disinvestment of HLL Life Care, if so, the details thereof and the reasons therefor;
- (g) whether the Government is promoting privatisation in the disinvestment process, if so, the details thereof and the reasons therefor; and
- (h) the action taken or likely to be taken by the Government to protect the employees under disinvestment process?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR. BHAGWAT KISHANRAO KARAD)

- (a) to (c) HLL Lifecare Limited is under strategic disinvestment on 'a going concern' basis in accordance  with  the  bidding  process  approved  by  the  CCEA.  In  order  to  implement  the CCEA's decision, various intermediaries viz., Transaction Advisor, Legal Adviser and Asset Valuer  have  been  appointed  by  the  Government  in  order  to  facilitate  the  transaction.

Preliminary  Information  Memorandum  (PIM)  inviting  Expression  of  Interest  (EoI)  from prospective bidders was issued by the Government in December 2021. Multiple EoIs were received from the Interested Bidders. Further, Qualified Interested Bidders (QIBs) were given access to the Virtual Data Room (VDR) in June 2022 and due diligence is being carried out by the prospective bidders.

- (d) No, Sir.
- (e) and (f) Transaction Adviser, to which the EoI (Expression of Interest) bids were submitted, has  informed  that  a  State  Government  had  submitted  its  bid  as  the  Lead  Member  of  a Consortium  in  response  to  the  Expression  of  Interest  (EoI)/  Preliminary  Information Memorandum (PIM) floated by DIPAM and the bid was given due consideration as per the provisions of the PIM/EoI. However, as the said bid did not meet the eligibility criteria as per the  provisions  of  the  PIM/EoI,  the  EoI  of  the  State  Government  could  not  qualify.  A communication  in  this  regard  has  been  sent  by  the  Transaction  Adviser  to  the  State Government.
- (g) Disinvestment  process  of  the  Government  has  two  components-  (i)  Minority  stake  sale through listing (IPO) and stake dilution through stock exchange with Government retaining majority  ownership  and  management  control  (ii)  strategic  disinvestment  through  which management control is passed to strategic acquirer.

Strategic disinvestment is based on the rationale that wherever competitive industry has come of age, the economic and job-creating potential of the public enterprise and the economy is better realized in the hands of private sector through infusion of capital and better management practices, while freeing public resources for social sector and infrastructure.

In February, 2021, the New Public Sector Enterprise ('PSE'') Policy for Atmanirbhar Bharat has  been  issued  which  lays  down  a  broad  roadmap  for  existing  PSEs.  The  policy  has delineated  four  broad  Strategic  Sectors  based  on  the  criteria  of  national  security,  energy security, critical infrastructure, provision of financial services and availability of important minerals.  In  Strategic  sectors,  bare  minimum  presence  of  the  existing  public  sector commercial enterprises at Holding Company level will be retained under Government control. The  remaining  enterprises  in  a  Strategic  sector  will  be  considered  for  privatisation  or merger/subsidiarization with another PSE or for closure. PSEs in non-strategic sectors shall be considered for privatisation, where feasible, otherwise such enterprises shall be considered for  closure.  The  enterprises  such  as  Not-for-profit  companies,  or  providing  support  to vulnerable groups, or having developmental/promotional roles, etc., are exempted from the scope of the policy.

- (h) The terms and conditions in the Share Purchase Agreement (SPA)/Share Holders Agreement (SHA)  for  strategic  disinvestment/privatisation  contain  employee  related  provisions  to suitably  address  employees  concerns  such  as  employee  protection,  gratuity  and  provident fund. Further, labour laws and regulations relating to protection, working conditions, welfare, etc.,  as  applicable  will  also  continue  to  be  applicable  to  the  privatised  PSEs.  After privatisation, the prospects of the employees are also expected to improve with the growth in production, productivity and profitability.

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