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Govt sells 26% HZL stake to Sterlite for Rs 4.45 bn

The government on Wednesday decided to sell its 26 per cent stake in Hindustan Zinc to Sterlite Industries along with management control for Rs 4.45 billion.

Cabinet Committee on Divestment, which met in New Delhi under the chairmanship of Prime Minister Atal Bihari Vajpayee, cleared a bid by Sterlite for HZL, Divestment Minister Arun Shourie told reporters.

Sterlite bid about Rs 900 million higher than the reserve price of Rs 3.53 billion. The second best bid was from Birla Group company Indo Gulf which quoted Rs 3.21 billion, he said.

Indo Gulf and Sterlite were the only two bidders for government's stake in HZL, price bids for which closed last Wednesday.

Following the sale of 26 per cent equity, the government holding in the metal PSU would come down to 49 per cent from 76 per cent now.

The new partner would now have to make an open offer for additional 20 per cent stake as per Securities and Exchanges Board of India guidelines.

As many as six players had evinced interest in the company including Allied Deals, Glencore, Metdist-Phelps Dodge combine and Binani Zinc-Korea Zinc consortium.

French banking major Banque Nationale De Paris-Paribas (BNP-Paribas) acted as global advisors.

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