The extraordinary general meeting (EGM) of National Aluminium Company (Nalco), the public sector aluminium major, today approved a proposal to increase the aggregate ceiling for foreign institutional investors' (FII) portfolio investment in the company up to 49 per cent of the paid up capital.
This follows the government decision to disinvest 30 per cent shares of the company through American depository receipts (ADR)/global depository receipts (GDR) route.
The raising of FII limit through a special resolution in the EGM was necessitated as the FII investment in the company is slated to go beyond the normal permissible limit of 24 per cent following disinvestment. At present, the combined FII holding in the company is only three per cent.
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Nalco's paid up capital is Rs 644.31 crore of which 87.15 per cent stands in favour of the Union government. The rest 12.85 per cent shares, which were disinvested in phases between 1991 and 1995, are held by FIs, FIIs, mutual funds, public and sundry investors.
As per the disinvestment roadmap, the government, in the first phase, will offload 30 per cent stake in the company which will take the aggregate disinvested shares to 42.85 per cent. In the second phase, further disinvestment will be done to give up controlling stake in the company to a strategic partner.
Among others, the French conglomerate Pechiney has shown interest to be the strategic partner of government of India in Nalco, one of the lowest producer of aluminum in the world. Aluminum Pechiney, a subsidiary of Pechiney, is the technology provider to Nalco.
During a visit to Orissa earlier this month, the chairman and chief executive of Pechiney Group, Jean Pierre Rodier, told reporters that his company has long association with Nalco for about 20 years with Nalco. "We will be glad to take it over".
He, however, pointed out that the offer price of the government of India for disinvestment should be reasonable.
Rodier said, Pechiney may have to compete with other global aluminum majors like Alcoa of Canada and Norsk Hydro of Norway for takeover of Nalco which has a track record of consistent good performance.
Meanwhile, the government has initiated the process of appointing a global advisor and valuer as a prelude to the disinvestment drive. Nalco is the second PSU in Orissa chosen for privatisation. The fertiliser maker Paradeep Phosphates Ltd (PPL) was sold to the K K Birla owned Zuari-Chambal group at a consideration of Rs 151 crore recently.