Search the Internet          Tips  Sites: Finance, Investment

Govt to invite bids for Hindustan Zinc by end-Feb

The government will invite bids for the second time, by the end of February, for a 26 per cent stake in state-run Hindustan Zinc Ltd, a central minister said on Monday.

Only those firms that were in the final round of the first bidding process will be called again, government officials said.

"We will re-invite financial bids by February-end," Ravi Shankar Prasad, minister of state for mines, told Reuters from New Delhi.

In November, the government rejected a bid by copper and aluminium producer Sterlite Industries, saying the amount it had offered was below the minimum 'reserve' price, but it revealed neither this price nor Sterlite's offer.

The failure of the first round of bidding was another setback for India's decade-old privatisation programme, which has limped along in the face of political opposition and global economic uncertainty.

Hindustan Zinc, 75.92 per cent owned by the government, has six lead-zinc mines with a combined annual capacity of 3.49 million tonnes and four lead-zinc smelters -- with a zinc capacity of 169,000 tonnes and a lead capacity of 43,000 tonnes.

The company reported on Monday a sharp 95 per cent year-on-year drop in October-December net profit to Rs 36.90 million ($764,608). Its total income fell to Rs 3.53 billion from Rs 4.25 billion.

PRIVATISATION WOES

Divestment Minister Arun Shourie had told reporters in November he was 'disappointed' that the privatisation of the country's largest zinc and lead producer had not succeeded.

The company had world class mines and its union was also in the favour of privatisation, he said.

But Shourie also said the privatisation proposal had attracted good interest and at least five bidders had stayed in the race till the very end.

While Sterlite was the only company to have put in a price bid, several other firms had shown interest during the initial stages.

These included Bhushan Steel and Strips, Binani Industries along with Korea Zinc, London-based Allied Deals, Indo-Gulf Fertilisers, Swiss-based commodities group Glencore and Britain-based Metdist, a Hindustan Zinc official said.

Shourie said that the government would review the selloff plan and come up with a fresh proposal for the privatisation panel to consider.

ALSO READ:
The Divestment Development