Vedanta offers Rs 16,000 cr for Govt stake in Hind Zinc, Balco

Suresh P. Iyengar S Shanker Mumbai | Updated on November 14, 2017

Mr Anil Agarwal, Chairman, Vedanta Group

Vedanta Group, which is in the midst of reorganising its holding in India, has offered Rs 15,000-16,000 crore to buy out the Government's stake in Hindustan Zinc and Bharat Aluminium Company.

Mr Anil Agarwal, Chairman, Vedanta Group, told Business Line that the company is in talks with the Government and expects the deal to happen in a year.

“We have made lot of value addition and raised capacity at both the companies after it was acquired. Besides, these companies have the best of the technology and rank among the top when it comes to cost of production,” he said.

According to sources, the Finance Ministry has started consultations with the Law Ministry on stake sale.

The Government holds a residual stake of 29.54 per cent stake in Hindustan Zinc and 49 per cent in Balco after the disinvestment in 2001. It had raised Rs 551.5 crore by divesting stake in Balco and Rs 750 crore in Hindustan Zinc to Sterlite Industries.

In January this year, the Government expressed its interest to offload the remaining stake in both the companies.

Room to raise more debt

Sterlite Industries is now being merged with Sesa Goa to form a new entity Sesa Sterlite.

Three more group entities Cairn India, Vedanta Aluminium and Madras Aluminium are to be merged into Sesa Sterlite, along with debt of $9 billion.

“Sterlite had the call option to buy stake in both companies. Since it is being merged to form Sesa Sterlite the option will also be transferred. The merged entity, Sesa Sterlite, will have enough room to raise further debt to execute the deal as it will be generating enough cash. Sesa Sterlite itself will have a cash surplus of $6 billion (Rs 30,000 crore),” Mr Agarwal said.

Published on March 01, 2012

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