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Mines Ministry has sought Law Minister Kapil Sibal's opinion on whether it can auction the remaining government stakes in Hindustan Zinc and Balco without seeking the approval of Parliament.
While the Finance Ministry is of the view that the residual stake in the two companies be auctioned, the Mines ministry wanted to use 'put and call' option for the stake sale, sources said.
Earlier, the Law Ministry had opined that the Parliament should authorise the stake sale in HZL and Balco.
"The Mines Ministry has now sought the opinion of Law Minister Kapil Sibal. The Finance Ministry has also concurred with the view of the Mines Ministry," sources said.
The government, which currently holds 29.5% stake in HZL and 49% stake in Balco, is looking at exiting from the two firms in which Anil Agarwal-led Vedanta Group holds majority stake. The government had sold controlling stake in these companies between 2001-2003.
The stake sale is top of agenda of the government, which has budgeted to raise Rs 15,000 crore by way of residual stake sales in the current fiscal.
The Law Ministry had last month permitted 'put and call' options in mergers and acquisitions, but the Finance Ministry is of the view that the mode be used prospectively.
Since the stake sale of HZL and Bharat Aluminimum Company (BALCO) is long overdue, the Finance Ministry is of the view that the right valuation can be obtained if the stake sale is done through auction.
The Law Ministry had earlier suggested selling remaining government stake in HZL requires Parliament approval as it was incorporated in January, 1966 as a public sector company, after the erstwhile Metal Corporation of India Ltd was nationalised.
The Law Ministry had pointed out earlier that a Supreme Court order of 2003 had stayed disinvestment of HPCL and BPCL, saying they were formed through a statute and required Parliament approval and the same is applicable for HZL also.
In January 2012, Vedanta Resources had offered Rs 17,275 crore for buying out the remaining stake of the government in Hindustan Zinc and BALCO. The company Board had also taken shareholders' approval in August last year to sweeten the offer by up to 25% to Rs 21,635 crore.
At present, Hindustan Zinc is the richest profit-making subsidiary of Vedanta with a cash and cash equivalent of Rs 19,282 crore as on December 2012. The company had reported a net profit of Rs 5,526 crore and net revenues of Rs 11,405 crore in 2011-12.
Similarly, BALCO an unlisted company had produced about 2,46,000 tonnes of Aluminium and had 18% market share by production volume in the country in 2011-12. It had reported a gross revenue of Rs 3,050 crore and EBITDA of Rs 374 crore during the last fiscal.
