Wednesday, September 20 2006 12:48 Hrs (IST) - World Time -

New Delhi: To avoid another Balco-like situation, the Finance Ministry has mooted a proposal to sell the Government's remaining shares in erstwhile public sector firm Hindustan Zinc Ltd to the public.

A cabinet note has been circulated to this affect and the Cabinet Committee on Economic Affairs is likely to take up the matter at its next meeting, official sources told PTI.

They said the government wants to sell its stake in the company before April next year as after this deadline Sterlite, the strategic partner in HZL, would get the option of buying the stake through a call option.

In case of Balco, the exercise of call option by Sterlite has already landed the government in a legal battle. The matter is now being heard by Delhi High Court and the government has set up a Committee of Secretaries to look into the issue.

In Hindustan Zinc, the government has 29.53 per cent stake and going by the current price of about Rs 584 per share it could mop up more than Rs 7,200 crore.

The company's share price has seen a significant appreciation in the last few years and has, in fact, more than doubled in the past 8-9 months. In 2002, the government had sold its stake at Rs 40.51 per share.