After the strategic sale, the Centre is likely to offload an additional 24-30 per cent stake to financial institutions and the public at a later date.

Jardine Fleming, the global advisor to Balco's divestment programme, has also taken a final decision on two critical issues which were hanging in balance before the Cabinet cleared the disinvestment proposal.

While the proposed restructuring of Balco's huge equity base of Rs 488.85 crore will be put off till the divestment of the Government's stake to the strategic investor is through, the on-going Rs 1,000 crore-plus expansion programme will be delayed till such time the new management charts out an expansion strategy for the company.

Jardine Fleming investment banking head Roddy Sale said: "Inspite of the political instability, we have received a very good response from India and abroad. The whole process will take at least another couple of months as currently we are preparing a valuation report and studying the financial aspects of the company. After working out the financials we will be zeroing in on the possible buyer."

"Labour is not a major issue as we are certain that after the strategic sale the company will expand its production base and will be able to utilise the work force in a beneficial manner. Quality of assets is also not a problem area," he added.

The expansion programme consisted of setting up a new 40,000 tonne per annum cold rolling mill, modernisation of the 2 lakh tonne alumina refinery and the hot rolling mill, and adding two more captive power plants of 70 mw each.

Stalling the equity restructuring, which has been cleared by the company's board, till a later date will enable the Government to raise a larger amount through the process.

The Government has set itself ahigher target of raising Rs 10,000 crore in 1999-2000 from the disinvestment process and is eager to get along with the Balco issue as quickly as possible, sources in the Union ministry of mines said.

The sources pointed out that Nalco, which is also slated for disinvestment, has already recast its equity base of Rs 1,288 crore by half.

Balco, which has an integrated complex in Korba, Madhya Pradesh, has an installed capacity of 200,000 tonne of alumina and a 100,000 tonne per annum smelter. The downstream facilities include 40,000 tonne of rolled products, 35,000 tonne of properzi rods, 7,000 tonne of extrusions, and 18,000 tonne of billets and slabs.

During the first nine months of the current fiscal, the company has produced 67,000 tonne of primary aluminium, compared with 65,000 tonne in the corresponding nine months of the previous fiscal.

Among the interested companies, Alcan has already increased its presence in India by increasing its stake in Indal to 54.6 per cent. It has been lobbying for astrategic stake in Balco for almost two years, a fact that Indal officials have denied.

Alcoa had earlier planned a $1 billion alumina project with Larsen & Toubro, but had later walked out. Domestic major Hindalco, on the other hand, is planning a Rs 8,000-crore integrated aluminium project but is yet to take a final decision on it.

Analysts said that if Hindalco is a serious bidder, it may put off its greenfield venture and go in for a brownfield expansion of Balco's capacities.