In a move to attract Sterlite Industries and the AV
Birla group for the loss-making Hindustan Copper (HCL),
the divestment ministry has decided to ease norms for group
transfer of equity stakes in the divested company, allowing
the successful bidders a greater say in the matter.
A decision to this
effect has been taken in the case of HCL where the government
is divesting all its equity by incorporating the new provisions
in the transaction documents, merchant banking sources
close to the development said.
ministry will facilitate a more flexible approach towards
intra-group transfers of the HCL stake. It will also make
restructuring hassle-free, the sources say. Under the
current ministry norms, government permission is needed
to effect any transfer of stake by a strategic partner
in a divested company.
Under the new norms,
government approval will not be required in case the equity
in HCL is transferred from the company to its subsidiaries
or any other group companies of the successful bidder.
At present, Sterlite Industries and Biral Copper are the
remaining bidders for HCL.
currently holds a 98-per cent stake in the copper major,
which will be divested to a partner along with management
control. AF Ferguson has been mandated as the global advisor.
Recently, the core
group of secretaries on divestment had cleared the transaction
documents for the sale of equity. The group had, while
approving the documents, rejected a demand by bidders
seeking a further round of restructuring.
year the union cabinet had approved a restructuring package
for the company to the tune of Rs 440 crore, including
an element of cash infusion support for separation package
and extension of guarantees towards a loan. The copper
major has a workforce of around 6,500 and has been incurring
losses for the past several years.