The Centre has revived the disinvestment process for Hindustan Copper Ltd. But the original proposal has been revised as the PSU dropped the idea of a fresh equity issue.

Mr Shakeel Ahmed, CMD of HCL, confirming the development told Business Line that the Department of Disinvestment of the Union Ministry of Finance recently initiated inter-ministerial consultations on a revised proposal for divestment of 10 per cent of the company's paid-up capital.

“A note from the department over the proposal is in circulation among economic ministries. It is expected that the proposal may be put before to the Cabinet Committee on Economic Affairs within a month,” Mr Ahmed said.

The integrated copper producer had first proposed a follow-on equity offer of 10 per cent in 2010-11 along with the divestment.

The company submitted a red herring prospectus with the market regulator and had a round of pre-road shows abroad with investors.

Investment bankers were also appointed, who also had suggested indicative valuation based on EV-EBIDTA and discounted cash flow methods.

But towards the end of 2010-11, the department withdrew the original proposal.

In 2011-12, the HCL board decided against the follow-on share issue as its cash flow improved to fund its expansion plans. The increase in copper prices and shift in focus towards production of ore concentrates rather than the metal ensured continuity of the change in decision.

The LME price of copper has seen significant improvement in the last week and the price increased from $8,100 a tonne on April 23 to $8,600 a tonne as on April 30, a jump of about six per cent.

> jayanta_mallick@thehindu.co.in

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