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Centre may not opt for stake sale in Hindustan Zinc, Balco this fiscal

New Delhi: The government is unlikely to sell its residual stake in Hindustan Zinc and Balco in the current fiscal as it looks at ONGC and Coal India disinvestments to meet the current year's target.

Sources said the disinvestment department wants clarity on the CBI probe and the Supreme Court verdict in Hindustan Zinc (HZL) case, while for Balco the valuation report is still awaited.

 Centre may not opt for stake sale in Hindustan Zinc, Balco this fiscal

No immediate stake sale. Andrew Middleton/Flickr

"For HZL, there is a case pending in the Supreme Court and more clarity is needed. It is going to take some time before a decision can be taken," a source said.

Also, the Disinvestment Department is yet to receive the valuation report of both the companies, the source said.

The government currently holds 29.5 percent stake in HZL and 49 percent in Balco. During 2001-03 period, the government had sold majority stakes in the two erstwhile PSUs to Vedanta Group.

"We are first eyeing ONGC and Coal India. If we are comfortable with the proceeds, we might not go in for residual stake sale as only three months are left," the source said.

The Disinvestment Department plans to sell 5 per cent stake in ONGC and 10 percent in Coal India in January-March quarter.

ONGC stake sale could fetch about Rs 17,000 crore and CIL around Rs 20,000 crore at current market prices.

The government had budgeted to collect Rs 15,000 crore through sale of residual stake in private companies in current
fiscal.

Higher excise mop-up from petrol and diesel and decline in oil import bill on account of sharp decline in international crude oil prices could bring savings to the government kitty.

"The government may not rush in for residual stake sales at this moment," another source said.

The HZL case is stuck in the Supreme Court after the National Confederation of Officers' Associations of Central Public Sector Undertakings filed a PIL challenging the proposed disinvestment, saying the decision is "irrational, illogical, illegal, unreasonable, mala fide and arbitrary".

The Association sought a direction to restrain the Centre from going ahead with disinvestment till the case is pending.

CBI had earlier informed the apex court that the agency had registered a preliminary enquiry into the sale of a part of the government's share in the PSU to Vedanta's subsidiary in 2002-03.

In January 2012, Vedanta had proposed to acquire the government's remaining stake in the two erstwhile PSUs for about 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, Vedanta Board is now empowered to make an offer of up to Rs 21,636.56 crore for the remaining government stake in HZL. For Balco, the offer can be up to Rs 3,026.14 crore.

PTI

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Updated Date: Dec 17, 2014 17:03:28 IST