Financial Daily from THE HINDU group of publications
Friday, Jun 18, 2004

Cross Currency

Group Sites

Corporate - Mergers & Acquisitions

Sterlite keen on acquiring residual Govt stake in Balco

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

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Welspun Gujarat bags Rs 407-cr Libyan order

BILT plans to increase farm forestry coverage programme
Bata assures shareholders on revamp plan — Batanagar model township work to begin by November
Paranjape Constructions to spread wings abroad
BHEL bags RUVNL Dholpur power project
EIL plans to bid for Delhi, Mumbai airports
Coal India to discontinue selling directly to non-core sectors
NBFAL bags `Clean' award
CESC plans to retire part of debt to bring down interest costs
Sterlite keen on acquiring residual Govt stake in Balco
Hewitt Associates merges with Exult
Kakinada to get bio-diesel plant
IMG Academies unveils master plan for sports complex
Ramco Industries to set up Rs 17-cr fibre cement sheet unit in Kutch — Net profit up 30 pc; to pay 75 pc final
Sneha Media ties up with TV9 for news content
Jagsonpal Pharma announces 3:1 bonus
Coking coal crunch shrinks SAIL sales

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line