Undeterred by elections, the government has set in motion the process to divest its residual stakes in Hindustan Zinc and Balco, which was postponed from FY14 to FY15. The department of disinvestment has drawn up a request for proposal (RFP) for corporate valuers and has sought the Election Commission’s permission to issue the RFPs, government officials told FE.
The centre holds 29.5% in Hindustan Zinc (HZL) and 49% in Balco, both of which are majority owned by Anil Agarwal-promoted Vedanta Resources. The residual stake-sale, originally part of Chidambaram’s FY14 disinvestment budgeted estimate of R54,000 crore, is now scheduled to be completed this fiscal, and is expected to fetch the exchequer R15,000 crore, according to interim budget estimates.
?R15,000 crore is the minimum expected amount from the sale. Vedanta claims the valuation of our stake is about R20,000 crore. But as per the process in any stake-sale we will appoint professionals to value our stake,? a senior finance ministry official said. During the model code of conduct, any RFP, Request for Query (RFQ), agreement or tender issued by the government requires EC approval, the person added
?We asked EC for approval some 10 days ago. They are yet to get back. Once they do and once we do appoint a valuer, the process of valuation will take 4-6 weeks. After that we will float RFPs for merchant banks which will advise us on how best to offload the stake,? the official said.
Hence, the final stake-sale is expected to take quite some time since an empowered group of ministers will take the final call after the appointment of the merchant bank, though the official could not say how long the entire process could take.