To avoid Balco-like situation, the government plans to take the market route to off-load 13 per cent of of the 29 per cent shares it holds in Hindustan Zinc Limited.
The government plans to sell 13 per cent shares of the total 29.54 per cent shares it holds in the company through public offer, sources said.
Based on the average price of the company, shares on the stock exchanges, government can raise up to Rs 1700 crore (Rs 17 billion) from selling 54,929,147 shares in HZL.
The government wants to part with its stake in HZL before April next year as after that present owner Sterlite will get right to buy the entire residual stake.
Sterlite, which had bought Balco, had exercised its call option for the remaning 49 per cent stake in the company. But the sale could not be completed because of tough stance taken by Sterlite and government over valuation.
To buttress its stand, Sterlite sent a cheque for Rs 1098 crore (Rs 10.98 billion) to the government for the stake even before the differences over valuation could be sorted out. It even sent a legal notice in a bid to put the government on the back foot.
In order to avoid a repeat, the government has decided to sell a part of its share in HZL through public offer.
In 2002, government sold 26 per cent of ts shareolding in HZL to Sterlite Group for Rs 445 crore (Rs 4.45 billion). A year later, it sold another 18.92 per cent shares of the company to the new owner.
At present, Sterlite owns 64.92 per cent stake in HZL while 3.08 per cent is with institutions and 1.7 per cent is with public.
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