Union mines minister Dinsha Patel on Wednesday claimed that the employees of public sector National Aluminium Company (Nalco) are not opposed to the government’s plan to dilute stake in the company.
“There is absolutely no opposition from the employees. There was earlier proposal to dilute 30 per cent, but the recent proposal talks about only 12.5 per cent. So I do not see why there would be any objection,” he said at Bhubaneswar after visiting Nalco facilities and meeting the company employees at Angul on Tuesday.
In September and October last year, several employee unions of the aluminium major had launched street protests objecting to the central cabinet decision to put Nalco on disinvestment block fearing such a move will pave the way for pushing the navratna company into private control in future. At present, the government of India holds 87.15% in Nalco and following the stake dilution, it will come down to 75%.
“Even after 12.5 per cent stake sell, the company will be at the hands of the government,” Patel said.
The employees union is concerned that if the central government sells one more per cent stake to bring it down to 74 per cent, then it might lose the power to move any important resolution as per the company law. The law stipulates that a person or entity having 26 per cent share can stall a decision taken by the majority share holder.
However, the government is yet to take a final call on stake dilution as the Empowered Group of Ministers (EGoM) assigned to take the call has deferred the decision due to disagreement over share valuation.
In November last year, the EgoM failed to reach a conclusion due to dismal performance of the company and had postponed decision to January this year. The minister, however, could not give a definite time period for a final decision.
“The matter is in hands of EgoM now, so I am unable to speak at present. We will take the decision at appropriate time,” he said.
During July-September , Nalco profit had nosedived to just Rs 5 crore against Rs 139 crore profit earned in the same quarter of the previous fiscal. The sharp dip in profit was attributed to disruption on power production at its captive power plant, which forced the company to use costlier imported coal and high cost emergency power from the state grid, which increased net operating cost by Rs 149 crore during the quarter.
The poor performance by the company led the EgoM to defer its decision on valuation concerns. But Nalco said its result would be excellent in the October-December quarter.
“Wait for the third quarter result. Nalco profit would reach three digit again,” said Anshuman Das, acting chairman-cum-managing director of the company.
To increase revenue, the company has been raising aluminium prices in the domestic market.