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Our Bureau

Chennai , June 17

STERLITE Industries (India) Ltd, which owns 51 per cent of Bharat Aluminium Company Ltd, is keen on buying the Centre's 49 per cent residual stake in the company. Sterlite has expressed its interest to the Government and expects a decision by July.

The company estimates that buying the Government's residual stake will cost Rs 750-800 crore, according to company officials.

Sterlite had acquired the 51 per cent stake in Bharat Aluminium Co (Balco) in March 2001 for Rs 551.50 crore. The shareholders' agreement specified that Sterlite should not sell its stake in Balco for three years while the Government could sell its remaining stake at any time, on which Sterlite would have first right of refusal.

According to company officials, who did not want to be quoted, Sterlite expects a decision by July. They do not perceive any problem in this, especially in the changed political environment, as it is not a fresh case of disinvestment but only sale of residual stake in a company in which the Government does not hold majority stake.

The price formula for acquiring the 49 per cent stake has been worked out in the shareholders' agreement, according to them.

The disinvestment in Balco by the then NDA Government at the Centre was the first major stake sale after it sold Modern Foods Ltd to Hindustan Lever Ltd the previous year. The Balco disinvestment had evoked sharp opposition with the then State Government even challenging the stake sale.

Sterlite owns two aluminium companies - Balco and Madras Aluminium Co - both of which it acquired. Balco is a fully integrated producer with its own bauxite mine, and an alumina refining and aluminium smelting complex at Korba. Both Balco and Madras Aluminium Co together account for about 20 per cent of aluminium sales in the country.

More Stories on : Mergers & Acquisitions | Aluminium

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