Centre can get $3.7 billion from stake sale in HZL, Balco

Keen to buy the government’s residual stake in Hindustan Zinc Ltd (HZL) and Bharat Aluminium Co (Balco), Vedenta Resources chairman Anil Agarwal said that the government can get Rs 25,000 crore (about $3.7 billion) from stake sale.

Vedanta had in 2000-01 acquired government’s 51 per cent stake in Bharat Aluminium Company Ltd for Rs 551.50 crore, and in 2002-03 it bought 26 per cent stake in Hindustan Zinc Ltd for Rs 445 crore.

The firm acquired 18.92 per cent stake in HZL in exercise of call option clause in the shareholder’s agreement between government and the firm. It had also acquired an additional 20 per cent stake in HZL from public.

It now wants to buy the residual 49 per cent stake in Balco and 29.54 per cent in HZL.

“It is a commodity. It goes up and down. Whenever they are ready... But, generally I would say they would get about Rs 25,000 crore for both. Its original value was Rs 500 crore,” Mr Agarwal said in an interview.

In 2012, the NRI billionaire had offered about $2.57 billion to buy the government’s remaining stake in the zinc miner and $296.5 million for the aluminium producer.

“If you see Hindustan Zinc... we have call option and we have given the call option and they (government) have to come back to us. We have not heard from them. A long discussion has happened, the ball is in their court,” Mr Agarwal said.

When asked if he is willing to raise the price, he said: “As and when this happens, it is all market driven... If we bid more they can sell it to us, but let them make up their mind.”