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Sterlite buys 26% stake in HZL for Rs 445 cr
In a series of major decisions on Wednesday, the Cabinet Committee on Disinvestment (CCD) decided to approve the sale of 26 per cent stake in Hindustan Zinc Limited (HZL) to Sterlite.
In a series of major decisions on Wednesday, the Cabinet Committee on Disinvestment (CCD) decided to approve the sale of 26 per cent stake in Hindustan Zinc Limited (HZL) to Sterlite.
The committee also approved the shareholder and sharepurchase agreement of IPCL, 61 per cent disinvestment in Engineers India Ltd and finalised the ITDC properties to be sold in second, third and fourth tranches. Sterlite bagged the second PSU after the Bharat Aluminium Company (Balco) for Rs 445 crore against the reserve price of Rs 353 crore.
Briefing newspersons, disinvestment minister Arun Shourie said Indo-Gulf was the second bidder, but did not disclose its bid price. ‘‘It was above the reserve price,’’ was all he said.
According to him, Sterlite’s bid is a major improvement from its last year’s bid price of Rs 321 crore for HZL, which was rejected. ‘‘For the last eight years, the HZL has given the dividend of Rs 3.5 crore per year. If we put Rs 445 crore in fixed deposit, it will fetch us Rs 44-45 crore per year in perpetuity,’’ Shourie claimed. Per share price of HZL has come to Rs 40.50. Price Earning ratio is 21, according to the minister. He also said that once the transaction is closed, an attractive ESOP scheme will be offered to the employees and full time directors of HZL. For IPCL, Shourie said, he will be meeting Petroleum minister Ram Naik on Thursday to understand the mechanism for marketing of gas and then bidding will take place.
Speaking on the CBI chargesheet against Reliance employees and the company, Shourie said Baijal has written to the CBI director for the details. ‘‘We will take a decision once we get the reply,’’ he said and assured that the matter will be sorted out before the IPCL bidding. Elaborating on what he would look into before deciding on the issue, Shourie said he would see three things in the chargesheet.
One, if the documents relate to security and integrity of the the country. Second, if documents were surreptitiously passed to the enemey and third, if employees of Reliance were involved in individual capacity or the company was involved in procuring secret documents. He also said that in security-related matters, chargesheet is enough for disqualification. ‘‘We will follow the guidelines blindly and mechanically,’’ he said.
Bureau Report
The committee also approved the shareholder and sharepurchase agreement of IPCL, 61 per cent disinvestment in Engineers India Ltd and finalised the ITDC properties to be sold in second, third and fourth tranches. Sterlite bagged the second PSU after the Bharat Aluminium Company (Balco) for Rs 445 crore against the reserve price of Rs 353 crore.
Briefing newspersons, disinvestment minister Arun Shourie said Indo-Gulf was the second bidder, but did not disclose its bid price. ‘‘It was above the reserve price,’’ was all he said.
According to him, Sterlite’s bid is a major improvement from its last year’s bid price of Rs 321 crore for HZL, which was rejected. ‘‘For the last eight years, the HZL has given the dividend of Rs 3.5 crore per year. If we put Rs 445 crore in fixed deposit, it will fetch us Rs 44-45 crore per year in perpetuity,’’ Shourie claimed. Per share price of HZL has come to Rs 40.50. Price Earning ratio is 21, according to the minister. He also said that once the transaction is closed, an attractive ESOP scheme will be offered to the employees and full time directors of HZL. For IPCL, Shourie said, he will be meeting Petroleum minister Ram Naik on Thursday to understand the mechanism for marketing of gas and then bidding will take place.
Speaking on the CBI chargesheet against Reliance employees and the company, Shourie said Baijal has written to the CBI director for the details. ‘‘We will take a decision once we get the reply,’’ he said and assured that the matter will be sorted out before the IPCL bidding. Elaborating on what he would look into before deciding on the issue, Shourie said he would see three things in the chargesheet.
One, if the documents relate to security and integrity of the the country. Second, if documents were surreptitiously passed to the enemey and third, if employees of Reliance were involved in individual capacity or the company was involved in procuring secret documents. He also said that in security-related matters, chargesheet is enough for disqualification. ‘‘We will follow the guidelines blindly and mechanically,’’ he said.
Bureau Report