Sterlite Industries Limited has bought the 26 percent stake in HZL for Rs 4.45 billion which works out to Rs 40.45 for Rs 10 equity share of the company. Sterlite has offered to buy another 20 percent of stake at the same price and has also the option for another 5 percent from the government to take its holding to 51 percent. But with 26 percent stake, Sterlite will get management control of the company.There were two contenders for HZL, Indo Gulf Industries, an Aditya Birla Group Company and Sterlite Industries. Both the companies quoted over the reserve price of Rs 3.53 billion. To start with, there were other big names wanting HZL like Glencore, Metdist-Phelps Dodge, Binani and Korea Zinc, and Bhushan Steel. All of them dropped out over a period of time. The declining prices of zinc in the world market with no possibility of a scarcity of supplies plus the reduction in customs duty on zinc from 35 percent to 25 percent in the latest budget, discouraged the potential bidders.
NSTL
