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Binani mulls 49 per cent sale to foreign ally

Rumi Dutta

Binani Industries, which is in the midst of hiving off its zinc business into a separate subsidiary, is now exploring the possibility of offloading 49 per cent stake to a foreign strategic partner.

The move would be an alternative in case the bid for public sector Hindustan Zinc does not materialise. The company has lined up a major expansion plan that could cost around Rs 5 billion.

The battle for Hindustan Zinc is expected to be a hot one with several leading domestic business houses and multinational metal companies having expressed interest in the zinc producer.

Senior Binani executives said: "Hindustan Zinc is of prime strategic importance to us. But if by chance we are unable to get the 26 per cent stake in the public sector, we will look at roping in a strategic partner for our zinc business."

"We have plans to offload 49 per cent stake and the money thus brought in by the partner will be utilised in the expansion plans of the company," they added.

The company's Rs 2.5 billion zinc business, after being hived off, will be an independent unit and a wholly owned subsidiary. "Further, funds requirement would then be worked out by the subsidiary independently," the officials said.

The company is planning major expansion and has estimated an investment of Rs 5 billion for technological upgradation and capacity addition to 100,000 tonne from 30,000 tonne.

The capacity expansion is expected to be in two phases. The smelter capacity will be raised from 30,000 tonne to 60,000 tonne in the first phase with an investment of Rs 3.50 billion. Subsequently in the phase II, capacity will be augmented to 100,000 tonne by pumping in another Rs 1.50 billion.

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