ManagementHindustan Copper to appoint merchant bankers on FPO
The state-owned copper miner Hindustan Copper will soon appoint merchant bankers to advise it on the proposed share sale aimed at part-financing its Rs 3,500-crore expansion plan.
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"We will soon appoint merchant bankers to advise us on the quantum of the shares the company should sell along with the government"s proposed stake sale of 10 per cent," Hindustan Copper Chairman and Managing Director Shakeel Ahmed told PTI.
The Disinvestment Department has communicated to the Mines Ministry to work on selling its 10 per cent additional stake in the company, he said.
The Central government currently holds 99.59 per cent stake in the copper miner.
"We want to sell a maximum of 10 per cent of our shares along with the government"s disinvestment programme. So the FPO could be of 20 per cent, but the ministry has to take final call on the plan, proposal for which will be submitted only after consulting the merchant bankers," Ahmed said.
The government is planning to raise over Rs 2,000 crore by selling its 10 per cent stake in the company based on the company"s current stock price. Shares of the company closed at Rs 266.30, up 2.27 per cent, on the Bombay Stock Exchange (BSE) on Friday last week.
The company will also raise a similar amount through the FPO. But, the company requires the sum in tranches, so its public offer could come in phases in the next five years.
"We do not need the money at one go, so we plan to raise the money through a phased public offer," Ahmed said.
The proposed up selloff of up to 20 per cent will happen in the next financial year, he added.
The ailing miner produced 38,000 tonnes concentrated copper in the last financial year and is working to form a joint venture with aluminium producer Nalco to mine the Banwas reserves in Rajasthan which has an estimated deposits of 70 lakh tonnes.
Hindustan Copper also plans to reopen its closed mines, including the four mines in Jharkhand.
With such ambitious plans lined up, the company is expecting a net profit of over Rs 100 crore in the current fiscal, Ahmed said. The PSU had a net loss of Rs 10.3 crore last fiscal.