BALCO: The Disinvestment Story




Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

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Excerpts

Stage I: The Tug of War

In mid 2000, leading domestic players like the Aditya Birla group company-Hindalco Ltd, SIL and the global major, Alcoa, expressed their interest to acquire 51% controlling stake in Balco. They had to verify the financial and operating performances of Balco before putting in a financial bid for purchasing the 51% equity on offer...

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Stage II: The Controversy Deepens

The deal between the GoI and SIL had attracted considerable flak mainly from the Opposition. There was a niggling doubt over the deal, which seemed to be a reflection of the lack of transparency. The GoI said that the bids were valued by four different methods. However, the value arrived at by these bids was not disclosed. Again, the reserve price was not disclosed nor the value of the bids by Hindalco and Alcoa and whether they were higher or lower than the reserve price...

Stage III: The Debate

Meanwhile, the Opposition demanded a Joint Parliamentary Committee (JPC) probe into the Balco deal. The GoI rejected the demand for a JPC probe leading to a walkout by the entire Opposition in the Rajya Sabha...

Stage IV: Post Sell Out Drama

After the sell out of Balco, Jogi continued to fire his salvo and demanded a parliamentary probe into the deal. Jogi alleged that the company was sold at a tenth of its actual value.

All's (Not) Well that Ends Well

The workers were not happy with the agreement and dubbed it as 'a face saving' exercise. 'We could have very easily bargained for a better deal if only we had negotiated earlier. Our bargaining powers got considerably reduced when the management realized that we were cracking under pressure' the workers said...


 

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