Finance Ministry wants fast track stake sale for Hind Zinc & Balco

The Finance Ministry has asked ministry of mines to expedite the Cabinet note on stake sale in Hindustan Zinc (HZL) and Bharat Aluminium Company (BALCO), say exclusive CNBC-TV18 sources. The Finance Ministry has also proposed that stake sale should be via the auction route.

HZL and Balco are erstwhile public sector firms that were sold to mining major Vedanta Resources during 2001-03.

The government may have to obtain a no objection certificate from Vedanta for the auction sale. It is also leant that the finance secretary believes that large amounts have been blocked in these assets and hence divestment must be done on a priority basis.

The government has a residual stake of 29.5 percent stake in Hindustan Zinc and 49 percent stake in Bharat Aluminium Company (BALCO) and the divestment programme would bring in over Rs 13000 crore (USD 2--2.5 billion) to the government.

The government had to wait for divest stakes in these companies due to some legal issues.

The long pending stake sale of government share in Hindustan Zinc (HZL) got delayed as the mines ministries legal advisor has suggested the ministry to revisit all divestment related issues of HZL.

This included verifying and rechecking documents relating to cases relating to the company writ petition filed by Prashant Bhushan in the Supreme Court, law ministries advises, all Cabinet proposals and decisions taken so far for the divestment of HZL.

Law ministry, in its opinion, had stated that since HZL was made a PSU under Metal Corporation Act which was passed by the Parliament divestment related matter will have to be approved via amendment to the said Act.