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Rediff News  All News  » Business » Anil Agarwal ready to buy govt stake in HZL, Balco

Anil Agarwal ready to buy govt stake in HZL, Balco

Last updated on: July 16, 2009 16:33 IST
Vedanta Resources chairman Anil Agarwal on Thursday said he is ready with Rs 8,000 crore (Rs 80 billion) for buying the government's residual equity in Balco and Hindustan Zinc, for which he will meet the Finance Minister this month.

In the face of the huge fiscal deficit, the government also needs to raise money from different sources, Agarwal told PTI, adding that he is ready to exercise his option to buy equity in the two erstwhile PSUs in which he had acquired a majority stake during the NDA rule.

Besides, Agarwal said that he would be interested in buying some loss-making PSUs if the government decides to put them on the block.

"I will meet the Finance Minister (Pranab Mukherjee) and Mines Minister (B K Handique) this month and exercise the call option. Once the government agrees, we will buy the shares within sixty days," he told PTI in an interview on the phone from London.

"We are looking at Rs 7,000-8,000 crore for buying residual equity in Hindustan Zinc and Balco. We have it," the NRI billionaire said.

As part of the privatisation programme initiated by the Vajpayee government, Vedanta had bought a 51 per cent stake in Bharat Aluminium Company (Balco) for Rs 551 crore (Rs 5.51 billion) and 64 per cent in Hindustan Zinc (HZL) for over Rs 750 crore (Rs 7.5 billion).

The government's stake in Balco is 49 per cent and in HZL 29.5 per cent, while the balance of HZL's equity is held by the public.

Agarwal said that acquiring the residual equity in the two companies is crucial for his overall corporate restructuring programme, which he is hoping to complete in the current fiscal.

The issue of residual equity in Balco had created a rift between Vedanta and the government and the matter had reached the Delhi High Court in 2006 regarding the mining major's call option to fully acquire the firm.

The metal and mining major had in May said that it is considering buying out the residual stake by November 2009.

With the acquisition of the residual stake, Vedanta Resources also aims to increase production in both the subsidiaries substantially.

"We could take the production to 7.5 lakh tonnes per annum, from the 2.04 lakh tonnes at the time of acquisition of Hindustan Zinc with the same management," Agarwal said.

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