Hind Copper to utilise FPO proceeds for capacity expansion

State-run Hindustan Copper will utilise the proceeds from its follow-on public offer mainly for ramping up its production to 12 million tonne per annum (MTPA) from current 3.15 MTPA by 2017, Parliament was informed today.

"The capital raised by HCL through Further Public Offer will primarily be used to fulfil the investment need of HCL to enhance copper ore production capacity from current level of 3.15 MT to 12 MT in the next five to seven years," Mines Minister B K Handique said in a reply to the Rajya Sabha.

The step of disinvestment is being taken to meet the mandatory requirement of SEBI for 10 per cent public shareholding as HCL is a listed company on stock exchange, Handique said.

Handique, however, did not give any time span for the launch of the FPO, which has been deferred to next year.

Disinvestment Secretary Sumit Bose last week had said that after Shipping Corporation, there would be no public offer in December.

Earlier the 20 per cent share sale programme, aimed at garnering about Rs 4,000 crore was scheduled to begin on December 6 and close on December 9.

The Cabinet in June had approved the disinvestment of 10 per cent paid up equity capital of HCL out of government's shareholding along with issue of fresh equity of equal size by the company.

At present, the paid up equity capital of HCL is Rs 462.609 crore, Handique said.

HCL's 0.41 per cent stake is already with the public. The proposed FPO will see the government holding coming down to 81.44 per cent from the present 99.59 per cent.

In July, the copper producer had appointed UBS Securities, ICICI Securities, SBI Capital, Kotak Mahindra and Enam Securities as the managers of the issue.

HCL had filed a draft prospectus with the Securities and Exchange Board of India in September for its proposed share sale programme.