The Cabinet Secretariat has asked the Mines Ministry to form an Inter-Ministerial Group (IMG) comprising officials from the Mines, Finance and Disinvestment ministries to study and make recommendations on the Vedanta Group’s offer to buy government stakes in Hindustan Zinc and Balco before putting it up for approval.
Mines Secretary Vishwapati Trivedi told journalists on Tuesday that the Cabinet Secretariat had asked the Ministry to form an IMG and discuss the offer made by Vedanta. “We are working in that direction, and, hopefully, will come back to the Cabinet on the issue after proper consultations,’’ he added.
The Vedanta Group, after approval from the shareholders, had offered the government Rs.21,635 crore, 25 per cent higher than the earlier offer, for buying 29.5 per cent stake in Hindustan Zinc, and 49 per cent in Balco. On earlier occasions, the government had rejected the offers made by the group.
Last month, the Mines Ministry had forwarded it to the Cabinet Secretary for guidance on reaching at the valuation. Vedanta had acquired 51 per cent stake in Balco in 2001 and 64.9 per cent stake in Hindustan Zinc Ltd (HZL) during 2002-03. In January, it had offered Rs.15,493 crore for buying 29.5 per cent in HZL, and Rs.1,782 crore for 49 per cent residual holding in Balco. The government, which is struggling to meet its disinvestment target for 2012-13 in view of the depressed market conditions, could well mop up over 72 per cent of the disinvestment target of Rs.30,000 crore for this year if the deal is approved.
Mr. Trivdei refused to set a deadline for submission of the report by the IMG saying setting a timeline was not possible now as the matter had to be discussed in the IMG first, and a consensus had to be reached.