Even as the Attorney General of India has suggested that the Central Government should auction its stake in Hindustan Zinc and Balco to the highest bidder, corporate lawyers say the final decision will be taken by the Supreme Court as the matter is still pending with it.
“This will take a lot of time, as the Parliament has to first approve the sale and then the Supreme Court has to pass an order to go ahead with the sale,” a corporate lawyer said.
Lawyers say the apex court is looking into the entire issue of taking permission from Parliament, as the company was formed through a statute. The Supreme Court had earlier stayed the disinvestment of some petroleum companies in 2003 as they were formed through a statute and required Parliament approval, to become eligible for disinvestment.
As per a deal between the Government and Vedanta, the Anil Agarwal-led company had to option to buy back the government’s 29.5% stake in the firm. Vedanta had first offered Rs 17,275 crore for buying out remaining stake of the government in both Hindustan Zinc and Balco.
Vedanta had valued government's 29.5% stake at Rs 15,493 crore in Hindustan Zinc. But the company’s board later sweetened the offer by up to 15% to about Rs 18,606 crore.
It had also agreed to raise the offer price for Balco by 63% to $550 million. As per the government plan, it will auction the shares and Vedanta will be given an opportunity to match it. But all these issues will now be decided by the Supreme Court.
Hindustan Zinc shares was up 6.7% on the Bombay Stock Exchange at Rs 114 a share. Balco is unlisted.
