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The finance ministry is likely to postpone its planned sale of residual stake in Hindustan Zinc Limited (HZL) and Bharat Aluminium Company (Balco) to next financial year, as a delay in the valuation process and an earlier observation by the Supreme Court weigh on the planned Rs 15,000-crore disinvestment.
Besides, the valuation process of the two companies had not been completed, a finance ministry official told Business Standard.
The Centre planned to sell its 29.5 per cent stake in Hindustan Zinc and 49 per cent in Balco as part of its 2014-15 disinvestment programme, after postponing this the previous year.
The disinvestment department had initiated the stake-sale process in July by appointing RBSA Valuation Advisors for this. A valuation was supposed to take two to three months, after which the plan was to appoint merchant bankers in a few months, hold road shows and sell the stake.
The Centre had also sought the Securities and Exchange Board of India’s (Sebi’s) advice on how to sell stake in Balco, an unlisted company. Sebi, however, had turned down the request, saying it had no jurisdiction over unlisted entities.
Now, five months later, the advisors have asked for more time. “They need additional time. Even if they come back with a valuation, we have just three months left. It is unlikely we will be able to complete the stake-sale process for the two companies this financial year,” an official said.
Additionally, there is a case stuck in the Supreme Court, after a group calling itself the National Confederation of Officers’ Associations of Central Public Sector Undertakings filed a public interest suit, challenging the proposed disinvestment.
The decision, it said, was, “irrational, illogical, illegal, unreasonable, mala fide and arbitrary”.
The Central Bureau of Investigation (CBI) had earlier informed the apex court that it had registered a preliminary inquiry into the part-sale of the firms government’s share in the to a Vedanta subsidiary in 2002-03. In January 2012, the Anil Agarwal-promoted company had proposed to acquire the government’s remaining stake in the two erstwhile PSUs for Rs 17,275 crore.
Last October, the shareholders gave their nod to raise offers for acquiring the remaining government stake in HZL and Balco by up to 43 per cent, or up to Rs 24,663 crore.
After shareholders’ approval, the Vedanta board is now empowered to make an offer of up to Rs 21,636.5 crore for the remaining government stake in HZL. For Balco, the offer can be up to Rs 3,026.1 crore.
