Sterlite Industries has offered Rs 16,000 crore to buy out government’s stake in Hindustan Zinc and Balco, almost a decade after Anil Agarwal-led firm acquired majority holding in zinc and aluminium producers.
The offer was made in January but Vedanta Resources, the parent company of Sterlite, is yet to hear from the government, group Chairman Anil Agarwal told PTI.
“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 in January, we have offered Rs 16,000 crore for buying stakes,” he said.
When asked for a projected time-line for completion of the deals, Chairman of the USD 70 billion metals and mining major said, “This is not in my hand. It is up to the government.”
Vedanta’s offer has been made at a time when the government is looking at various sources of increased revenue generation, including divesting its stake in the public sector units (PSUs).
Government still holds 49 per cent stake in Balco and 29.54 per cent in Hindustan Zinc. Majority holdings in these two firms were sold to Sterlite in 2001 and 2003 respectively.
However, the government does not seem to be satisfied with the offer, particularly for Balco. The empowered group of ministers had favoured a status quo.
Vedanta group company Sterlite Industries, through Sterlite Opportunities and Ventures (SOVL) holds 64 per cent stake in HZL. SOVL had initially acquired 26 per cent stake in HZL in 2002.
The Vedanta is revamping its corporate structure by merging Sterlite Industries into another group firm Sesa Goa.
Agarwal said the Vedanta Group firms would be able to generate USD 7-8 billion profits per annum and the surplus, thus generated, could be used for expansion plans.