Five companies including Oil and Natural Gas Corporation, BHEL, L&T-GAIL combine and Sun Group of Russia are in the race for acquiring 51 per cent government stake in Engineers India Ltd, whose transaction documents have been finalised and are  awaiting Cabinet approval.

"ONGC, L&T-GAIL combine, Sun Group, Bharat Heavy Electricals Ltd and Soros Chatterjee Group were the only companies, which went through the due diligence process," EIL chairman and managing director M K Dalal told a news conference in New Delhi.

He said the transaction documents including share purchase agreement have been vetted and were awaiting Cabinet approval after which financial bids would be called.

The government, which holds about 90 per cent stake in EIL, is selling 51 per cent stake to a strategic partner while another 10 per cent would be divested to employees.

Its divestment advisor ANZ had proposed that the government draws a special dividend of Rs 309 crore (Rs 3.09 billion), at the rate of Rs 55 per share, from the Rs 636 crore (Rs 6.36 billion) reserves and surplus of the company, which the EIL management opposed.

"We have two major projects in hand and expect another one shortly. Execution of these would entail huge working capital requirements and if special dividend is drawn from reserves we will have to raise suppliers credit that in turn would affect our profitability," EIL director (finance) D S Chakrabarti said.

Asked about securing construction contracts in Iraq, Dalal said, "It is too early to say. Our role would come after the security concerns are addressed and Iraq starts producing."

EIL has registered for consultancy contracts with Bechtel of the United States.

Dalal said the company was looking at forging project-specific alliance for the specialised overseas market and had been talking to a couple of companies from Malaysia, Vietnam and Indonesia.

"EIL has evolved into an engineering and contracting company with fairly diversified fields of operation as well as range of services. EIL has diversified into various infrastructure areas such as airports, urban development, highways and bridges and water related projects," he added.