HCL hopes to get Cabinet nod for FPO in April

New Delhi: State-owned Hindustan Copper on Sunday said it is hopeful of getting the government’s approval in April for its share sale programme, which is expected to raise a total of about Rs10,000 crore.“We are hopeful that the proposal for the follow-on public offer (FPO) will be placed before the Union Cabinet for its approval in April,” Hindustan Copper (HCL) CMD Shakeel Ahmed told PTI. The share sale in HCL is now proposed in a single phase against the earlier plan of two-tranche FPO, Ahmed added. The government plans to sell 10% of its stake in HCL through FPO. HCL will also be raising fresh equity in the same proportion.The government holds 99.59% stake in the firm. The divestment proposal has already been vetted by the department of disinvestment and the ministry of finance. Now the ministry of mines, the administrative agency of the PSU, is in the process of finalising the draft note which would be placed before the Cabinet.“The ministry, I understand, has already circulated the note for views of different ministries. Their suggestions are expected in 10-15 days,” Ahmed added. Hindustan Copper shares closed at Rs535.20 on the Bombay Stock Exchange on Friday. Based on the share price, the FPO could mop up a gross sum of around Rs10,000 crore.Mines ministry, had earlier expressed hope for getting the Cabinet clearance before 31 March, 2010 for the 20% planned FPO of HCL. “The delay is there because we decided to wait for 2009- 10 financial results of the company before finalising the FPO proposal. We anticipate a good result as the company had a better last four months in terms of productivity and also London Metal Exchange (LME) prices surged,” Ahmed said.The LME prices act as a benchmark for base metals like copper, zinc, lead. Copper prices on the LME fluctuated between $7,000 a tonne in December last year and $5,700 per tonne in February and then recovered to $7,880 a tonne level in last month.The company did not have a “good” April-November period and is unlikely to meet its production target of 3.6 million tonne copper ore for FY’10, he said. HCL plans to fund its Rs3,500-crore expansion programme by raising equity. The government needs the divestment proceeds to part fund its social sector and infrastructure programmes.The Centre has targeted to generate Rs40,000 crore in this fiscal through disinvestment in PSUs like SAIL, CIL, HCL.