Govt to retain its stake in Balco for now
An Empowered Group of Ministers (EGoM) today decided to maintain status quo with regard to its remaining 49 percent stake in aluminium maker Balco.
New Delhi: An Empowered Group of Ministers (EGoM) today decided to maintain status quo with regard to its remaining 49 percent stake in aluminium maker Balco.
Vedanta Group firm Sterlite Industries holds 51 percent stake in Balco. According to sources, Vedanta chief Agarwal had written a letter to Prime Minister Manmohan Singh on July 4 regarding the government's residual stake.
In a meeting of the EGoM, called to discuss the government's response to a letter by Agarwal, it was decided that status quo will be maintained, a senior Mines Ministry official told media.
"The Prime Minister wanted the EGoM to approve the draft of the letter to be sent to Vedanta chief and the EGoM today approved it saying that the status quo will be maintained," the official said.
Last year, the government had said that it would sell its residual stake in Balco at a much higher price, adding that the strategic sale of equity in Balco was done in "haste" in 2001.
During the tenure of NDA government, Sterlite had snapped up 51 percent stake in Balco for Rs 551 crore in 2001.
In January this year an arbitration panel had struck down call option of Sterlite Industries to buy government's residual stake in the firm.
With the call option, Vedanta group firm Sterlite was looking to acquire the remaining stake in Balco. Call option is an agreement that gives the buyer a right to buy some part of an asset at a specified price at a specified time frame.
The Empowered Group of Ministers, headed by Finance Minster Pranab Mukherjee, also include Law Minister Salman Khurshid, Mines Minister Dinsha Patel and Heavy Industries Minister Praful Patel.