Financial Daily from THE HINDU group of publications
Friday, Feb 17, 2006
Financial Daily from THE HINDU group of publications Friday, Feb 17, 2006 |
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Aluminium Industry & Economy - Disinvestment Govt's 49 pc stake in Balco valued at Rs 843 crore Ambarish Mukherjee
New Delhi , Feb 16 THE much-awaited valuation of the residual 49 per cent Government stake in Bharat Aluminium Company Ltd (Balco) has been finally completed by the SBI Capital Markets Ltd. According sources in SBI Capital Markets, the company in its report submitted to the Government has stated that the "fair business value of Balco is Rs 1,719.43 crore." "Thus, the fair value of the 49 per cent residual stake in Balco held by the Government comes to Rs 842.52 crore," sources said. "This means that if the Government accepts our report, the remaining stake in Balco, which bear a face value of Rs 10 each, will be sold to the strategic partner Sterlite Industries at Rs 101.64 per share," the sources said. Strategic disinvestment in Balco was the first such exercise undertaken by the National Democratic Alliance Government in 2001, when it sold 51 per cent stake in the company to Anil Aggarwal-controlled Sterlite Industries for Rs 551.5 crore. The move raised controversies regarding to the valuation as well as labour issues, leading to several court cases and ultimately the Supreme Court had to intervene to put matters to rest. Valuer sees fall in aluminium prices: According to the report submitted by the SBI Capital, a copy of which is available with Business Line, the entire valuation has been made on the assumption that international aluminium prices will go down over the next five years, though the prices are actually increasing since the past three years. "Between March 2003 and March 2005, aluminium prices on the London Metal Exchange (LME) have increased from $1,354.52 per tonne to $1,778.49 per tonne and is currently ruling at approximately $2,000 per tonne," aluminium industry sources said. According to the projections made by SBI Capital Markets based on which the valuation figure has been arrived at, international aluminium prices will go down from $2,000 per tonne in 2006 to $1,764 per tonne by 2009 and stagnate at this level till 2010.
Related Stories: More Stories on : Aluminium | Disinvestment | PSU
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