Cabinet okays govt's 49% stake sale in Balco via auction route

New Delhi: The Cabinet on Wednesday approved sale of government's 49 per cent residual stake in Balco through the auction route, which could fetch a minimum Rs 3,000 crore to the exchequer.

"The CCEA has cleared Balco stake sale through auction route," an official source said after the meeting of the Cabinet Committee on Economic Affairs headed by Prime Minister Manmohan Singh.

The Finance Ministry has already initiated the process of valuation of Balco as advised by Singh.

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

At present, London-listed Vedanta holds 51 per cent in Bharat Aluminium Company (Balco). In January 2012, Vedanta had proposed to acquire the government's remaining stake in the erstwhile PSU.

Vedanta's board has approval of shareholders to offer up to Rs 3,026.14 crore to the government for buying residual stake in Balco.

Balco had produced about 2.46 lakh tonnes of aluminium and 18 per cent market share by production volume in the country in 2011-12. It had reported gross revenue of Rs 3,050 crore and EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of Rs 374 crore last fiscal.

The proceeds from Balco stake sale would help the government inch towards its budgeted target of Rs 14,000 crore through residual stake sale in private companies.