Mines ministry favours ADR for Nalco sell-off

new delhi: the mines ministry has favoured an american depository receipt issue for diluting government stake in national aluminium company. "the ministry has informed disinvestment department that it is in favour of adr issue for disinvesting stake in nalco," official sources said. cabinet committee on disinvestment had earlier cleared disinvestment of 30 per cent stake in the aluminium major through adr/gdr issue along with domestic float. however, it had left open the percentage of stake to be offered through various routes. the government currently owns 87.13 per cent stake in the company with the remaining equity being held by public. adr issue is being favoured because the department felt that the company can withstand the pressure of going for the issue. moreover the option to list on american bourses implies that the company would have to ensure greater transparency in terms of accounting standards. sources added that adr would be a favourable option with government yet to firm up plans for the second phase of disinvestment in the company. "adr would allow the government greater leverage in terms of what it wants to do with its remaining equity holding", they said. inter-ministerial group, set up to finalise modalities for disinvestment, is scheduled to take a decision on the matter before the end of the month. government would then appoint joint global coordinators for the issue. nalco is currently in the process of adopting us-generally accepted accounting principles for listing on american bourses. interestingly french aluminium major, pechiney, has already announced its intention to bid for stake in nalco in case government decides to rope in a strategic partner.