The Vedanta Group Executive Chairman, Mr Anil Agarwal, has once again written to the Prime Minister on residual stake buyback in Balco and Hindustan Zinc Ltd (HZL). Vedanta has offered to pay Rs 17,000 crore to buy back shares.
“A letter has been sent to the Prime Minister, Dr Manmohan Singh, seeking an early decision on stake buy-back,” a senior Government official told Business Line.
Since last July, this is the second letter to Dr Singh from the Vedanta chief. Though the Government has initiated the process, it is yet to take a final decision on the issue. According to the source, legal experts have opined that even if there is some arbitration matter pending, there is no bar on negotiated settlement.
On July 6, Mr Agarwal, after meeting the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, had said that Vedanta’s offer was according to the terms of the agreement, and that he was open to discuss with the Government. He had requested the Government to consider his proposal.
Vedanta has offered Rs 15,000 crore for buying 26 per cent stake in HZL and Rs 2,000 crore for 49 per cent in Balco. A Committee of Secretaries has already considered the proposal and sought the views of the Empowered Group of Ministers (EGoM). A formal note has also been moved for convening the EGoM meeting.
However, following Mr Pranab Mukherjee’s elevation as President elect, there is no official word on the new EGoM. But a senior Government official admitted that any delay in decision is not good as the implementation of this proposal can bring more than 50 per cent of disinvestment target of Rs 30,000 crore for 2012-13.
Balco and Hindustan Zinc were strategically sold to Vedanta Group companies in 2000-2002. Though there was a call option for Vedanta, it could not be exercised due to a legal battle and other reasons. The matter came into the limelight last July when Mr Agarwal wrote to the Prime Minister.