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Cabinet Clears Sale Of Government’s 29.58% Stake In Hindustan Zinc Ltd

The choice would give a push to the federal government’s disinvestment drive within the present fiscal.

New Delhi:

The Union Cabinet on Wednesday authorized the sale of the federal government’s residual 29.58 per cent stake in Hindustan Zinc Ltd, which at present costs would fetch over Rs 38,000 crore to the exchequer, sources stated.

The Cabinet Committee on Economic Affairs (CCEA) authorized the sale of 124.9 crore shares authorities holds within the zinc producer which was offered to mining mogul Anil Agarwal’s Sterlite Industries in 2002.

Sources with direct data of the event stated the stake sale modalities might be determined by the DIPAM.

The choice would give a push to the federal government’s disinvestment drive within the present fiscal. The authorities has budgeted Rs 65,000 crore from PSU disinvestments and strategic gross sales.

It has already bought a bit of over Rs 20,500 crore from sale of its 3.5 per cent stake in Life Insurance Corporation (LIC).

HZL has been taken up after privatisation of Bharat Petroleum Corporation Ltd (BPCL) bought stalled following two of the three bidders strolling out of the competition.

Other strategic disinvestments reminiscent of Shipping Corporation of India (SCI) are going through procedural delays.

The authorities had in 2002 offered its 26 per cent shareholding together with administration management to Sterlite, which is a part of Mr Agarwal’s Vedanta group, for Rs 40.5 per share. A yr later, one other 18.92 per cent was purchased by the mining conglomerate.

In the 2 transactions, the federal government bought round Rs 769 crore.

Vedanta exercised a name possibility as per the share buy settlement however the authorities contested it. The agency dragged the federal government to arbitration however later withdrew it, paving the best way for the stake sale.

Last month, Mr Agarwal instructed PTI that his group can’t purchase greater than 5 per cent of the federal government’s residual stake in HZL except the phrases of the contract are modified.

He had indicated that his group will contemplate shopping for the whole stake if the phrases are amended and the shareholding is obtainable to it.

The sale of a 29.5 per cent stake representing over 124.96 crore shares would fetch round Rs 38,000 crore to the exchequer at present market costs.

Shares of HZL closed at Rs 305.05, up 3.14 per cent on the BSE. During the day, the scrip touched a excessive of Rs 317.30 a share.

HZL was a government-owned firm until 2002.

In April 2002, the federal government offloaded a 26 per cent stake in HZL to Sterlite Opportunities and Ventures Ltd (SOVL) for Rs 445 crore — thereby giving Vedanta group administration management in HZL.

Vedanta group later purchased 20 per cent from the market and one other 18.92 per cent from the federal government in November 2003, elevating its possession in HZL to 64.92 per cent. 

(Except for the headline, this story has not been edited by NDTV employees and is revealed from a syndicated feed.)

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