We want higher prices for BALCO, HZL residual stake: Handique
The government will sell its residual stake in metal firms BALCO and HZL for a much higher price as the strategic sale of equity in these companies was done in "haste", Mines Minister BK Handique said on Sunday.business Updated: Jun 13, 2010 15:31 IST
The government will sell its residual stake in metal firms BALCO and HZL for a much higher price as the strategic sale of equity in these companies was done in "haste", Mines Minister BK Handique said on Sunday.
"Disinvestment in Balco and Hindustan Zinc (HZL) was done in haste. I personally feel it needs to be more priced," he told PTI on the issue of sale of the government's stake in the erstwhile PSUs.
The NDA government had sold the majority stake in Bharat Aluminimum Company (Balco) in 2001. It also divested 45 per cent in Hindustan Zinc Ltd in two tranches to strategic partner Sterlite group. Sterlite acquired additional 20 per cent shares of HZL from the market by way of open offer, taking its stake in the firm to about 65 per cent.
It is now looking to purchase the remaining stake in the two entities.
The government has not ceded to the proposal of Sterlite and the matter is before arbitration in the Balco case. In Balco, the government still has a 49 per cent stake, while in HZL, it has about 29 per cent.
Handique said that internal assessment for pricing of the remaining 49 per cent stake in BALCO is "very difficult" as the company is not listed on the stock exchange, but it is being done.
"Very difficult to say. It is not listed. It (internal assessment) is being done," Handique said, exuding confidence that it will get a good price for Balco this time. "We expect to get a good price," he said.
NRI billionaire Anil Agarwal-led Vedanta Group's Sterlite Industries had bought a 51 per cent stake in Balco and 64 per cent in Hindustan Zinc for Rs 551 crore and over Rs 750 crore respectively. However, the matter of buying the residual stake in Balco has been stuck in arbitration for a long time now. A final hearing is expected by August this year.
Handique said the matter of Hindustan Zinc was a "similar case" too.
The acquisition of the residual equity in the two companies is crucial for Vedanta's overall corporate restructuring programme and continuing its thrust on Indian operations, the mining major had last month expressed hope to buy the government's remaining stake by the end of this fiscal.
"We have already made provisions in the accounts of Hindustan Zinc and Balco. We believe this year we can have the mandate of minority buyouts of Hindustan Zinc and Balco," Vedanta Chief Anil Agarwal had said.
Vedanta Resources had a total revenue of USD 7.93 billion in the fiscal year ended March 31, up 21 per cent from FY'09.