Vedanta's offer for stake in HZL, Balco to be vetted by IMG

The Group had recently offered govt Rs 21,635 crore, up to 25% higher than earlier offer, for buying 29.5% stake in HZL and 49% in Balco

Vedanta's sweetened offer to buy out government stakes in Hindustan Zinc and Balco will now be vetted by an inter-ministerial group before being put up to the Cabinet for nod, a senior government official said today.

"The Cabinet Secretariat has asked us to consult the offer by Vedanta at the Inter-Ministerial Group first and then bring it to the Cabinet. We are discussing on that," Mines Secretary Vishwapati Trivedi told reporters on the sidelines of an Assocham event here.

Vedanta Group recently got sharholders' approval to offer to the government up to Rs 21,635 crore, 25% higher than the earlier offer, for buying 29.5% stake in Hindustan Zinc, and 49% in Balco.

Its earlier offers have not been accepted so far.

After receiving the revised offer from The London Stock Exchange-listed Vedanta at the end of last month, the Mines Ministry had forwarded it to the Cabinet Secretary for guidance.

Vedanta had acquired 51% stake in Balco in 2001 and 64.9% stake in Hindustan Zinc Ltd (HZL) during 2002-2003.

In January, the group had offered Rs 15,493 crore for buying 29.5% in HZL, and Rs 1,782 crore for 49% residual holding in Balco.

If it goes through, this deal alone could meet over 72% of the government's disinvestment target of Rs 30,000 crore for this year.

Asked whether the proposal could be put up before the Cabinet within a month, Trivedi said setting a time-line is not possible now as the matter has to be discussed in the IMG first and a consensus has to be reached at.

The IMG comprises senior officials of Finance, Mines and other ministries, he said.