The mining ministry has chalked out a slew of initiatives aimed at making the ailing Hindustan Copper Ltd (HCL), which is up for divestment, a more attractive proposition.
Sources in the ministry said, the proposal includes reduction of workforce to the tune of 3,000, likely to be funded by the government, closure of a few mines and write-off of loans.
Four companies -- Sterlite, Indo Gulf Corporation, Finolex and Metdist of the UK along with US copper giant, Phelps Dodge -- have submitted their expressions of interest (EoIs) for HCL.
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The government has put on block its entire 98.7 per cent equity in the company and hopes to wrap up the selloff in three months.
Sources said the VRS programme will cost around Rs 440 crore. The proposal is pending with the Cabinet for approval. The company's workforce at present stands at a shade over 9,000. This is after reducing 8,000 people over the last 2-3 years.
Moreover, copper prices have been on the rise in the international market. Sources pointed out that if London Metals Exchange prices continue to increase some of the mines which were on the verge of becoming unviable would be spared. "Price increase would by itself make HCL more attractive" they said.
Earlier, the government had invited EoIs for 51 per cent equity in the company. The process, however, got delayed on doubts raised by the prospective bidders on the quantum of disinvestment and the unrest in the wake of the Balco controversy. Hence, the decision to completely exit the company and hand over to a strategic partner.
Sources said, HCL also has some valuable real estate which would be taken into account while doing a valuation of the company. The company owns a 31,000 tonne per annum copper smelter and a copper wire bar plant of similar capacity at Khetri in Rajasthan.
It also has a 60,000 tonne copperwire rod plant at Taloja in Maharashtra and a 47,500 tonne capacity copper cathode unit at Ghatsila, Bihar. In addition, it has reserves of 86.76 million tonne of 1.31 per cent copper at Khetri, said industry sources.
The HCL scrip today touched a high of Rs 56, short of its 52-week high of Rs 56.40, before it closing at Rs 50.25 on the Bombay Stock Exchange (BSE). Volume was at 6,600.