Environment auditor for Hind Zinc soon

Ravi Kapoor

New Delhi, Dec 9: The government will appoint an international firm this week to do environment audit for Hindustan Zinc Ltd (HZL).
According to official sources, the government has already shortlisted five global firms for preparing the environment audit report of HZL. The audit firm is expected to finish off the work within two months, they added.

According to officials in the disinvestment ministry, it was mainly at the behest of global majors, like Glencore, that the government decided to appoint an international firm for HZL audit. Glencore, it may be recalled, is one of the bidders of HZL.

Other bidders of HZL include Sterlite, the Birlas, Korea Zinc, Binani and Phleph Dodge. In fact, market response to the profit-making HZL was quite good, though in the sell-off process, which is lengthy and complicated, a few bidders dropped out. One of them was NRI-promoted Allied Deal.

At the last moment, however, bidders declined to take over HZL. Only Sterlite responded positively when the government called financial bids for HZL last month. The Sterlite bid was also rejected by the government as it was below the reserved price.

The government is selling 26 per cent of its equity in HZL along with the transfer of management control. Negotiations are still on with bidders.

According to sources, the government has not ruled out the idea of calling fresh bids, though it seems “very unlikely.” The government will call fresh bids only if it is convinced about “genuinely interested” parties. Once it is done, this will further delay the process.

At present, the government holds 75.9 per cent equity in HZL. The paid-up equity of HZL is 422.53 crore against an authorised capital of Rs 500 crore.

The company made a profit of Rs 90.42 crore in 1999-00. Its net worth on March 31, last year, was Rs 1,044.29 crore.

While the Disinvestment Commission in 1997 recommended sale of 25 per equity to the strategic partner, the government decided to sell 26 per cent shares. BNP-Paribas has been appointed as global adviser for HZL privatisation.