As the threat of war clouded the horizon on the Indian
subcontinent, India's government clinched two important
privatization sales. Maruti, India's biggest car-maker, was sold to
Suzuki - the first foreign company to win a major privatization
deal - and Indian Petrochemical Corporation (IPCL) went to Indian
conglomerate Reliance Industries.
Two small hotels were sold too, one to an investor from Muscat.
Together, the sales will fetch the government around $825 million,
one-third of its target for sales this year.
The Maruti sale was tricky, because the shareholders' agreement
ruled out sale of the government's stake in the unlisted company to
anyone unless Suzuki, an equal partner in the company, approved it.
A negotiated deal was the only way out, and that seemed elusive for
a while. In the end, a three-part deal was worked out. First, the
government will renounce its share of a rights issue, taking its
stake down to 45%. Suzuki will pay Rs10...
