The Centre will invite financial bids in August from prospective bidders for offering its 26 per cent stake in Hindustan Zinc. The bidders are in the final phase of completing due diligence. It is expected that the Department of Disinvestment would be able to finalise the strategic partner for the zinc major by September-October.
"The Centre has already shortlisted the bidders and financial bids will be invited next month," said merchant banking officials close to the disinvestment process.
However, the completion of disinvestment will take some more time as the strategic investor, which will get a 26 per cent stake through competitive bidding, will have to make an open offer to the shareholders for another 20 per cent share.
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The government has recently made it mandatory for the successful bidder for Hindustan Zinc to make an open offer for an additional 20 per cent stake in line with the Securities and Exchange Board of India's takeover code.
Earlier, some prospective bidders had asked for waiving the open offer in order to avoid delay in completing the deal. Prospective bidders in the race include the A V Birla group, the UK-based Allied Deal, Binani Industries in consortium with Korea Zinc, Glencore, Bhushan Steel and the UK-based Metdist in association with Phelps Dodge of Canada.
The Centre had barred Sterlite Industries, which had completed the due diligence, on Friday from bidding for Hindustan Zinc on economic grounds. The government is yet to complete the valuation of Hindustan Zinc.
The authorised capital of the company is Rs 500 crore, whereas the paid-up capital currently stands at Rs 422.53 crore. Hindustan Zinc, which has an ore production capacity of 3.49 million tonne per annum, operates the Zawar mine, Rajpura-Dariba mine, Maton rock-phosphate mine, Rampura-Agucha mine and Agnigundala mine in Andhra Pradesh, and the Sarialli mine in Orissa.