Vedanta offers Rs16,000 crore for government stake in HZL, and Balco
01 Mar 2012
London-based Vedanta Resources Plc has offered around Rs16,000 crore to the government for buying out the latter's residual 29.5-per cent stake in Hindustan Zinc Ltd and 49-per cent stake in Balco.
According to analysts, the move forms part of the Anil Aagarwal-controlled firm's efforts to consolidate its natural resources business under the newly created holding company, 'Sesa Sterlite'.
Vedanta's chairman Anil Agarwal confirmed having made the offer in January after the government asked him to do so, but was awaiting a response.
"Government had asked us, if we will be interested to take its stakes in HZL and Balco. We answered in the affirmative. As per the prevailing market price, we have offered Rs16,000 crore for buying stakes. That was in January," chairman of the $70-billion metal and mining conglomerate, Agarwal told agencies.
According to Mint newspaper, it had reported on 26 February that the proposal was under study and would be sent to a group of ministers for a final decision. The Vedanta offer comes at a time when the government was hard pressed to meet its disinvestment target and was saddled with a massive fiscal deficit.
Agarwal said the price Vedanta had quoted for buying residual stakes in HZL was based on the zinc producer's average stock price over a month. Vedanta had acquired 51-per cent stake in Balco in 2001, from the government during the NDA regime, for Rs551 crore.
