 "AG approves HZL stake sale auction")
The government's 29.5 per cent stake in the company is worth Rs 16,000 crore at the current market valuation. The value is expected to be higher in the auction as the company is sitting on cash reserves of Rs 23,632 crore and is the most profitable in the Vedanta group stable.
"Hindustan Zinc has ceased to be a government company for almost a decade. One way could be to sell the shares in the open market, if the market price is considered to be fair," G E Vahanvati has said in his communication to the law ministry.
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The move will be a policy decision that needs to be taken after considering all the facts and circumstances, he said.
Vahanvati's opinion was sought as the government is keen to clear stake sales in public sector companies as well as in those earlier owned by it but where it has only residual stakes now, to meet this year's divestment target of around Rs 55,000 crore by March-end and contain the fiscal deficit at 4.8 per cent of the gross domestic product.
In a meeting on December 3, Prime Minister Manmohan Singh had directed to take Vahanvati's opinion for selling stake in Hindustan Zinc amid controversies such as the Central Bureau of Investigation (CBI) filing a preliminary inquiry on a divestment in the company in 2002-2003.
Vahanvati has said CBI's inquiry was on the original divestment of Hindustan Zinc, which has now become "fait accompli".
The mines ministry is now expected to move a final note to the Cabinet Committee on Economic Affairs for selling the remaining 29.5 per cent stake in the company through auction, the sources said.
Last week, the Cabinet had decided not to wind up Specified Undertaking of UTI (Suuti) for the time being, paving the way for a sale of its holdings in three private firms - ITC, Larsen & Toubro and Axis Bank worth Rs 35,000 crore.