Mines ministry moves note on HZL, Balco residual stake sale

Finance Minister P Chidambaram on Monday said the mines ministry had moved a note for the sale of the government’s residual stake in Hindustan Zinc Ltd (HZL) and Bharat Aluminium (Balco).

The matter would go to the Cabinet and the finance ministry would give its views in due course, he said. And, declined to comment on the pricing, noting he’d earlier recused from this matter.

Sterlite Industries, an arm of Vedanta, had bought 51 per cent in Balco for Rs 551 crore in 2001. The deal had a call option. This meant the buyer had an option to buy the remaining government equity in the company at a future date and price.

In HZL, Sterlite had acquired a part of the government’s stake in 2003 for around Rs 750 crore. The government holds 29.5 per cent in the company. The government is formalising a response to Vedanta Resources’ offer to buy the residual stakes in the two group firms for about Rs 17,000 crore.

Chidambaram expressed confidence that the government would raise Rs 30,000 crore from stake sale in central public sector enterprises in the remaining months of the financial year, despite drawing a blank till date on this front.

He said the department of disinvestment (DoD) had got approval of the cabinet for disinvestment in Hindustan Copper, National Aluminium (Nalco), Steel Authority of India, Rashtriya Ispat Nigam (RINL), Bharat Heavy Electricals, Oil India, Minerals and Metals Trading Corporation (MMTC) and NMDC.

The government has deferred the Initial Public Offer of RINL thrice already due to pricing issues. DoD is currently targeting stake sale through the offer for sale route in a number of companies, including Oil India, Nalco, MMTC and NMDC.

Chidambaram was talking to reporters after outlining the fiscal roadmap based on the Kelkar panel report. He said no decision was taken on the government land monetisation suggestion of the panel.