Divestment likely to take place in mid-October: Hind Copper

The government has approved sale of its minority stake in Hindustan Copper. In an interview to CNBC-TV18, Kailash Dhar Diwan, chairman and managing director of Hindustan Copper says divestment is likely to take place in mid-October. 

As far as price is concerned, he says, Empowered Group of Minister will take a call. "They will decide the price band, just one or two days before the issue comes into the market," he adds. Also read: FinMin proposes 9.5% stake sale in NTPC, eyes Rs 13168 cr Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Ekta Batra. Q: Hindustan Copper will be one of the disinvestment candidates going forward. Can you share some important details with us with regards to the programme? A: Two or three days back, Cabinet Committee on Economic Affairs (CCEA) has approved the disinvestment plan for Hindustan Copper. Since Government of India is our promoter and it is holding 99.59% of the equity, this time government has decided to disinvest 9.59% of its share. Q: Can you elaborate on more details with regards to pricing and the timeframe by when this could possibly come about? A: As far as price is concerned, Empowered Group of Minister will take a call. They will decide the price band, just one or two days before the issue comes into the market. Q: Timeframe? A: Timeframe will be decided by the Empowered Group of Minister. You will hear very soon, expected time is middle of next month. Q: Is this only a disinvestment plan or will Hindustan Copper look to raise some capital for itself? A: This is basically disinvestment plan to dilute the government’s stake in the company. At present, Hindustan Copper is having sufficient funds to meet their expenses for the upcoming projects. Right now, we have no plans to raise funds from the market because we are having sufficient funds to meet our expenses. Since we are a debt free company, whenever we will need additional fund, we will take a call. Q: Where exactly would you see copper prices stabilising? A: Normally, copper prices, metal prices are influenced by both the fundamental factors such as demand and supply and also by the global liquidity. Sometime back copper prices had been suppressed, but now it has started looking up. At present, it is hovering around USD 8,300 a tonne. So, in my opinion, copper prices will be stable for sometime. It will be hovering around USD 8,000-8,500 a tonne. _PAGEBREAK_ Q: Could you just take us through the production targets for the company? What have been laid out for the company for FY13 and FY14? A: As far as FY12-FY13 is concerned, our MoU target is set by the government. MoU was signed between Ministry of Mines and management of Hindustan Copper. Target for the FY12-FY13, for MIC production, is around 35,000 tonne. As far as cathode production is concerned, it is at 18,500 tonne for FY12-FY13. As far as FY13-FY14 is concerned, we will decide before the end of the current financial year. Q: For the current year, we are almost half way through the mark, but we believe there is a shortfall with respect to your output. What is the shortfall? A: As far as our MIC production is concerned, there has been some setback on the maintenance front. So, we have already achieved around 80% so far as MIC production is concerned and around 90% so far as our metal production is concerned, refined copper production is concerned. Q: Will you make up the shortfall then? A: I will not leave any stone unturned to make up this shortfall. We hope that we will make up the shortfall by the end of this fiscal year. Q: Hindustan Copper was looking at acquisitions in Afghanistan. Could you just take us through the current status of that? A: Yes. We have submitted our bid to acquire a mine in Afghanistan along with the other two major public sector player, SAIL and NALCO and two private player – Jindal and Monnet Ispat. We are expecting, hoping that we will get atleast one mine. Q: Any sort of plans with regards to diversification from your core copper business? Could you just update us on any sort of progress on that front? A: Right now, we are working on some alternatives to go for diversification either in the field of power or in the field of other non ferrous mining like gold etc. But we have not yet firmed up our strategy. We will always be on the look out to acquire some thing in the area of non-ferrous, if it is possible. Q: Can you just detail your expansion plans? A: We have a massive expansion plan on track. We have awarded six contracts out of eight. We are hoping that we will be able to complete this expansion programme by the end of year 16-17. We will be enchaining our current capacity from three million tonne to 12 million tonne by the end of FY16-FY17. So far as fund is concerned, we have sufficient fund to meet our expenses for the next two years. After FY14-FY15, if we feel that we are in need of fund, we will take a call at that point of time. We are a debt free company. So, we can take a call after two years from now.