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  • Published 4.03.00
Calcutta, March 4 :     Hindustan Copper Ltd (HCL) has decided to hive off its two units at Khetri and Taloja into a separate company and sell the majority stake to a strategic partner. The move is aimed at making a turnaround from the heavy losses the company suffered during the last three years. The public sector company has already floated global tenders to appoint a consultant for the valuation of assets in these two units. "The assets of these units will form 49 per cent of HCL's contribution to the new company. The strategic partner will have to bring funds to acquire a 51 per cent stake in the joint venture," a senior HCL official said. The proceeds from the sale of the stake would be used to retire high-cost debt and also to rejuvenate its operations in Indian Copper Complex (ICC) and Malanjkhand Copper Project (MCP), which are suffering heavy losses. The official said ICC and MCP would also be spun off into a separate company in the second phase after undertaking a thorough manpower and production restructuring of two units. "Once the two units become viable, these will be brought under a separate company in which HCL would divest up to 51 per cent of its stake to another strategic partner," the official said. HCL's divestment proposal has already been approved by the government. According to company sources, the divestment is expected to be completed by September this year. While the official refused to divulge any details about the global tendering, sources said six global consulting majors are vying for the assignment. "We now have a very insignificant role to play in the whole disinvestment process since the government itself is looking into it," the official said. HCL, which suffered heavy losses over the last three years because of the slump in prices at the London Metal Exchange, has also decided to close its unviable mines at Pathargora and Kendadih, for which it has received the government's nod. Earlier, the company had closed its Mosaboni and Badia mines in 1998. HCL registered a net loss of Rs 172 crore on a turnover of Rs 479.49 crore during the financial year ending September 30, 1999. Its accumulated losses stood at Rs 408 crore. The company will seek the shareholders' approval on the proposed restructuring and hiving off of its two profit-making units into a new company in the 32nd annual general meeting on March 24.