Vedanta awaits govt's response on HZL, Balco stake sale

Vedanta Resources has not revised its Rs 17,275-crore offer made in January to buyout government’s remaining stakes in Hindustan Zinc and Bharat Aluminium Company.

In an e-mailed reply, a company spokesperson said that Vedanta is still waiting to hear from the government on the offer made in January for acquiring remaining stakes in the two firms and the Anil Agarwal-led firm has not revised its offer.

According to a company presentation, minority buyouts at HZL and Balco remain “strategic priorities” for Vedanta, which had secured its shareholders nod in August to sweeten the offer by up to 25 percent over its January offer for the two erstwhile PSUs.

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“Vedanta had made an offer to the Government of India in January 2012 for a buyout of the government’s residual stake in HZL and Balco. We await the government’s response to our offer. We have not made any revision to this offer to the government of India,” the spokesperson said.

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In its January offer, the metals-mining-oil conglomerate had valued government’s remaining 29.5 percent stake in HZL at Rs 15,493 crore. The 49 percent residual holding of government in Balco was valued at Rs 1,782 crore.

However, a Committee of Secretaries, in March, had termed Vedanta’s valuation of the two firms as “conservative”.

In August, the then Mines Secretary Vishwapati Trivedi had said that Cabinet Committee of Economic Affairs (CCEA) would take a final call on the matter.

At present, Vedanta Board has the power to sweeten the offers by up to 25 percent in the two firms. As per this, offer price for HZL can get raised up to a maximum of Rs 18,606 crore ($3.378 billion) and up to Rs 3,028 crore ($550 million) for Balco.

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The two erstwhile PSUs were sold to the Anil Agarwal-led metal-mining-oil conglomerate during 2001 to 2003 through the disinvestment programme of the then NDA government. Vedanta currently holds 64.9 per cent stake in HZL and 51 per cent stake in Balco.

HZL, the largest zinc producer of the country, is also Vedanta’s richest profit making subsidiary with a cash and cash equivalents of Rs 19,136 crore as on September, 2012. The company has a zinc-lead production capacity of over 1 million tonnes per annum (MTPA) and silver production capacity of 16 Moz.

Balco, the unlisted subsidiary of Vedanta, had produced 246 kilo tonnes of aluminium in last financial year. Currently it is expanding smelting capacity to 0.6 MTPA, along with captive power units.

PTI