Mines minister may seek Cabinet nod for HCL share sale next week

The Mines Ministry may seek Cabinet nod next week for the share sale programme of ailing copper miner HCL, which is expected to fetch Rs 9,000 crore.

"We have seen the draft Cabinet note of Hindustan Copper Ltd (HCL). They (Mines Ministry) are sending it next week," a Department of Disinvestment official said here. 

The two-phase share sale plan of HCL will see the government selling 10 per cent of its stake in the company.

The company will raise fresh equity in the same proportion through a follow-on public offer (FPO). At present, the Centre holds 99.59 per cent stake in HCL.

HCL plans to fund its Rs 3,500-crore expansion programme by raising equity. The government needs the divestment proceeds to part fund its social sector and infrastructure programmes.

The Ministry of Mines -- the administrative ministry of HCL -- had earlier said that it will seek Cabinet's clearance for the FPO before the end of current fiscal.

The first phase of FPO comprising, five per cent disinvestment and raising of fresh equity in the same proportion by the company, is expected in the next fiscal.

The company's shares were trading at Rs 493.50, down 0.26 per cent on the Bombay Stock Exchange.

Based on the share price the miner and the government could mop-up an estimated Rs 4,500 crore each.

However, the exact amount to be raised will depend on the price fixed by the government for the FPO.