Hindustan Zinc, Bharat Aluminium stake sale will be a windfall

Vedanta Resources today said its offer to buy out government stakes in Hindustan Zinc and Bharat Aluminium Company (Balco) for which it is awaiting the response will be "windfall" for all stakeholders.

"We have no doubt that this (deal to acquire remaining stakes in the two firms) will happen but we need to have patience. India is a democratic country...," Vedanta chairman Anil Agarwal said in a conference call, while announcing the company's annual results.

"I can not answer when it will happen but it (the deal) is going to have windfall for everybody," he added.

The government, which currently holds 29.5 per cent stake in HZL and 49 per cent stake in Balco, is looking at exiting from the two firms in which majority stakes were sold to the mining giant between 2001 and 2003.

However, valuations remain stumbling block for the deals, particularly in case of Balco which is unlisted.

Agarwal had said earlier that he is "not looking to negotiate anything" and "a transparent process needs to be adopted" for arriving at the right valuation of the two firms.

Vedanta's January 2012 offer of Rs 17,275 crore for government's remaining stakes in HZL and Balco had failed to break the ice. Subsequently, the company secured shareholders' nod to sweeten the offer by up to 25 per cent in the two firms but did not raise the offer and instead, preferred to wait for government's moves on the matter.

The shareholders approval to raise the offer expires on August 9 this year.

Besides, selling stakes in both the companies require Parliament's approval as they were formed through the statute. The Mines Ministry, the parent ministry for both the firms, has recently asked Law Ministry to provide legal opinion on the matter.