Government initiates valuation process for Balco stake sale

NEW DELHI: Going ahead with the residual stake sale in Balco, the government today started the process of valuation of its 49 per cent stake in the company.

The Department of Divestment (DoD) has invited proposals from merchant bankers or chartered accountant firms with experience in handling valuation of companies.

"The government will select and appoint one valuer with requisite experience in valuation of companies," the DoD said, adding, the applicants can apply proposals are to be submitted by July 11.

The paid up capital of Bharat Aluminium Company Ltd (Balco) as on March 2013 is Rs 220.62 crore.

Balco is an unlisted subsidiary of Vedanta and its valuation has been a bone of contention between the mining firm and the government.

The government had in 2001 divested 51 per cent stake in Balco to Vedanta group firm Sterlite Industries.

Last October, Vedanta shareholders approved increasing the offer to acquire the government's remaining stake in Balco. The Vedanta board is now empowered to make an offer of up to Rs 3,026.14 crore for the government's stake.

In February, the Cabinet in the UPA government had cleared the Balco stake sale.

The company was incorporated in 1965 as a public sector enterprise of the Government of India and major operations of Balco are in Korba (Chhattisgarh)

Besides, the DoD has also started the process of valuation of Hindustan Zinc (HZL) for selling its 29.5 per cent stake in the company.

In the current fiscal the government has budgeted to collect Rs 15,000 crore through selling residual stake in private companies, which includes HZL and Balco.