The strategic investor in Bharat Aluminium Co (Balco) will be finalised by April 2000.
The initially shortlisted bidders for the divestment process are currently doing their due diligence, which will be through by next week, Roddy Sale, head of investment banking at Jardine Fleming, said.
The inter-ministerial group has, however, decided to put the expansion plans of Balco on hold till the new owner is decided.
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Balco was planning to set up a cold-rolling mill which would allow it to move higher up the value chain.
The total investment proposed in the expansion was around Rs 1,000 crore.
The strategic investor, who will take full management control, will also have the option to decide on the long-pending equity restructuring, and a possible initial public offering.
Sale said it was up to the government and Balco's new owner to decide on a further dilution of the stake. There has been several proposals that the government lower the stake to 74 per cent at a later date.
"The stake holding to the extent of 51 per cent in any case gives management control and thus makes no difference in terms of control to the strategic investor," Sale added.
Jardine Fleming is the global advisor to the divestment process. "There has been a good response from both foreign and domestic companies," Sale but declined to disclose names.
Balco has a smelter capacity of 100,000 tonne which is located in Korba, Madhya Pradesh. However, the quality of primary aluminium produced by Balco has come under stiff criticism by users over the last few years.