he country's second-largest aluminium producer NALCO may invest about Rs 700 crore (Rs 7 billion)for picking up stake in two mines of state-run Hindustan Copper and a detailed framework on strategic alliance is likely next week. The development comes ahead of the copper miner's share sale, which would see disinvestment of 10 per cent paid-up equity capital out of the government's shareholding in HCL along with issue of fresh equity of an equal size by the firm. "NALCO's due diligence for buying stakes in Hindustan Copper's mines at Ghatshila in Jharkhand and Malanjkhand Copper Project in Madhya Pradesh is complete. Top officials of both the PSUs will be meeting next week over the issue," said a Mines Ministry official privy to the development. Both NALCO and HCL fall under the administrative control of Mines Ministry. A detailed framework is likely next week to determine the form of the strategic alliance as to whether it would be a joint venture agreement, the official said. A top NALCO official, who did not want to be quoted, said NALCO's stake could be up to 50 per cent in both the mines as the lease ownership is with Hindustan Copper Ltd. "Discussions are on for NALCO's investment in Hindustan Copper Mines. Our objective is the growth of HCL and we are exploring all options,"
Mines Minister Dinsha Patel said when asked about it. Asked whether the move before the FPO was SEBI compliant, he said: "Any decision which is taken will be within the rules and guidelines." The NALCO official, however, said the investment if finalized may take place either before the FPO or after it. NALCO had filed its draft red herring prospectus with the SEBI in September and the government is to take a call on the timing of the FPO, which was earlier scheduled for December2010. Last month, Disinvestment Secretary Sumit Bose had indicated that HCL FPO might come this fiscal. The Cabinet had in June last year approved disinvestment in NALCO and accordingly, in July the Copper miner had appointed UBS Securities, ICICI Securities, SBI Capital, Kotak Mahindra and Enam Securities as the managers of the issue. The 20 per cent share sale programme, earlier aimed at garnering about Rs 4,000 crore (Rs 40 billion), was slated to begin on December 6 and close on December 9. HCL would use the proceeds to ramp up its production to 12 million tonne per annum by 2017 from 3.15 MTPA now. HCL's 0.41 per cent stake is already with the public. The proposed FPO would see the government holding coming down to 81.44 per cent from the present 99.59 per cent. Shares of the copper miner were trading at Rs 264 apiece, up 2.96 per cent from the previous close on the Bombay Stock Exchange in the afternoon trade.
© Copyright 2015 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.