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Govt to consider strategic sale in NALCO on Thursday

The privatisation panel is expected to discuss a strategic stake sale in National Aluminium Company, the country's second largest aluminium firm, when it meets on Thursday, a senior government official said.

India has stepped up its privatisation drive in recent months after it sold controlling stakes in a giant telecoms firm, an oil marketing company, the country's second largest petrochemical company and the largest carmaker, Maruti Udyog Limited.

The government plans to raise Rs 120 billion through stake sales in the current financial year which began in April and Divestment Minister Arun Shourie has said the government hopes to exceed the target.

The divestment ministry official, who did not wish to be identified, told Reuters the panel headed by Prime Minister Atal Bihari Vajpayee, would also discuss the stake sale in Manganese Ore (India) Ltd, a mining firm.

"Due diligence for the public issue in NALCO is on and the Cabinet committee will discuss the strategic sale in the company. Most probably a roadmap will be finalised," the official said.

He said the panel was also expected to decide on a strategy to strengthen the privatisation process "so that maximum benefit could be reaped" in the months ahead. The official did not give details.

The government, which holds an 87.15 per cent stake in NALCO, plans to reduce its holding to 26 per cent by first selling 10 per cent through a domestic issue and then 20 per cent through the issue of American Depositary Receipts.

This would be followed by the sale of slightly over 29 per cent to a strategic partner after reserving two per cent for employees.

The official said the cabinet panel would finalise the stake sale schedule for Manganese Ore (India) Ltd, a profit-making mining firm which operates in Maharashtra and Madhya Pradesh.

The firm which was incorporated in Britain was fully taken over by the government in 1977 and has a turnover of Rs 1.80 billion.

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