Left to counter Nalco stake sale

Mumbai: The Left parties are planning a concerted move to counter the government's decision to sell 10 per cent equity in the two profit-making PSUs - National Aluminium Company (Nalco) and Neyveli Lignite Corporation (NLC). CPI(M) leader Sitaram Yechury, who made the statement in New Delhi, said this would lead to further rounds of disinvestment in these companies.

He said senior Left leaders would meet soon to chalk out a counter strategy.

Yechuri said Nalco had raised resources for its Phase-II expansion on the strength of its equity base. The decision to sell Nalco's equity will result in increasing its debt component and that would affect the company's health, he pointed out.

"The decision would be forcing the company to further disinvest if it wants to expand. If it is further disinvested, the government will lose its control over the entity," he warned. He said this seems to be what "the government exactly wanted. They are forcing the PSUs which are disinvested to further disinvest."

A statement released by the CITU said: "Earlier, disinvestment of 12.85 per cent of Nalco had led to acquisition of 1.15 per cent share by its competitor Hindalco and 2.19 per cent by foreign institutional investors. CITU apprehends the entry of FIIs, Hindalco and Sterlite Group through disinvestment process in Nalco."

The fresh round of disinvestment, planned through the public offer route, would dilute government holding in Nalco to 77.15 per cent from the current 87.15 per cent. In NLC, the government would hold 83.56 per cent post sale against the current 93.56 per cent.