Cabinet approves sale of 29.58% stake of Government in Hindustan Zinc

New Delhi, May 25 (PTI) The Cabinet Committee on Economic Affairs (CCEA) has appointed Hindustan Zinc Ltd. (HZL) has approved the sale of the remaining 29.58 percent stake of the government. The government can get around Rs 38,000 crore from this sale.

Sources gave this information on Wednesday.

Sources said the CCEA has approved the sale of government’s stake in Hindustan Zinc.

The move will help the government achieve its disinvestment target in the current financial year. The government has set a target of raising Rs 65,000 crore in the current financial year through disinvestment and strategic sale of PSUs.

The government has already raised Rs 20,500 crore by selling its 3.5 per cent stake in Life Insurance Corporation (LIC) in the current financial year.

After two of the three bidders withdrew, Bharat Petroleum Corporation Ltd. (BPCL) privatization has come to a halt. After this the government has decided to privatize Hindustan Zinc. Apart from this, there is procedural delay in the privatization of Shipping Corporation of India (SCI).

Sources said that 124.96 crore shares will be sold under 29.58 percent stake sale. With this, the government can get Rs 38,000 crore at the current price.

Shares of Hindustan Zinc on Wednesday closed at Rs 305.05, up 3.14 per cent on the BSE. During the day’s trading, it had gone up to a high of Rs 317.30.

In 2002, the government sold its 26 per cent stake in Hindustan Zinc to Anil Agarwal-led Vedanta Group’s Sterlite at Rs 40.5 per share. A year later, the group acquired another 18.92 per cent stake in the company from the government. In these two transactions, Rs 769 crore was received by the government.

Anil Agarwal-led Vedanta had recently said that if the government does not change the terms of the contract, the company can buy only five per cent more from the government’s remaining stake in Hindustan Zinc.

Hindustan Zinc was a government-owned company until 2002. In April 2002, the government transferred its 26 per cent stake in Hindustan Zinc to Sterlite Opportunities & Ventures Ltd. (SOVL) for Rs 445 crore. This put the management control of the company with Vedanta Group.

The Vedanta group later bought another 20 per cent stake in the company from the market. Subsequently, in November 2003, the group acquired another 18.92 per cent stake in the company from the government. This increased Vedanta’s stake in Hindustan Zinc to 64.92 per cent.