New Delhi: The government is considering the option of selling its residual stake in Hindustan Zinc and Balco-- two erstwhile PSUs that were sold to mining giant Vedanta Resources during 2001-2003.
The move is aimed at meeting the Rs 30,000-crore disinvestment target for the current fiscal, though a final call will be taken by the Cabinet, official sources said.
They added that the Mines Ministry, which had moved a note last month for sale of remaining government stakes (residual stake) in the Hindustan Zinc Ltd (HZL) and Bharat Aluminium Company (Balco), has suggested two-three options for conducting a proper valuation of the two erstwhile PSUs.
After receiving comments from the Finance Ministry, the Mines Ministry may take the proposal to the Cabinet for its consideration, they further said.
At present, the government holds 29.5 percent stake in HZL and 49 percent stake in Balco.
In January, Anil Agarwal-led Vedanta Resources had offered Rs 17,275 crore for government's remaining stakes in HZL and Balco. This amounts to over 57 percent of disinvestment target of Rs 30,000 crore.
Finance Minister P Chidambaram had said last week that selling residual stakes in the two erstwhile PSUs are one of the options before the government and will be used only when existing options -- divesting equity in public sectors firms -- are exhausted.
"Apart from the seven-eight companies we have lined up, there is also residual stake in couple of companies, which were strategically sold earlier, actually privatised. Government is no longer the majority owner. So, that's there... But we will resort to those options only when we exhaust the companies that have been lined up for disinvestment," Chidambaram had said.
Vedanta Resources, whose Board has the power to sweeten the offers by up to 25 percent in the two firms in rupee terms (up to Rs 21,635 crore), had said last month that it is still waiting to get a response from the government on its January offer.
At present, Hindustan Zinc is the richest profit-making subsidiary of Vedanta with a cash and cash equivalent of Rs 19,136 crore as on September, 2012. The company had reported a net profit of Rs 5,526 crore and net revenues of 11,405 crore in 2011-12.
On the other hand, Balco is an unlisted subsidiary of Vedanta and its valuation has been a bone contention between the mining firm and the government.
Last week, the government raised Rs 808 crore by selling 5.58 percent stake in Hindustan Copper, which was the first stake sale in a PSU in the current financial year. The government may pare some of its stakes in few more companies like NMDC before 2012-end.
First Published: Sunday, November 25, 2012, 11:28