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Hindustan Copper plans 10 percent follow-on offer

Kolkata: The public sector mini-ratna company Hindustan Copper has decided to come out with a follow-on public offer (FPO) to offload 10 percent of its equity after the government dilutes 10 percent stake, the company said here today. "Proceeds of the disinvestment would go to the government but we need money for our capital expenditure for which we have proposed an FPO," chairman and managing director Shakeel Ahmed said on the sidelines of a seminar organised by Confederation of Indian Industry. The public sector integrated copper producer has decided to hit the capital market next year with the government intending to divest 10 percent of its 99.59 percent holding. This would take the total stake dilution to 20 percent. The rest of the shares are with banks and financial institutions (0.09 percent), private and corporate bodies (0.05 percent), and the public (0.27 percent). The company plans to raise Rs.1,700 crore through the FPO, which would be about half of its Rs.3,500 crore expansion plan. "We plan to raise output by 3.5 times in five-seven years' time through reopening of closed mines, optimising production from existing mines and acquisition of new ones," Ahmed said. Hindustan Copper's annual ore production, at present, is 3.19 million tonnes, which it plans to take up to 11.4 million tonnes by 2019. About the company's plans to acquire mines overseas, he said talks have started with a private player in Namibia for acquiring mining leases. "We are also eyeing Afghanistan and Chile to get copper mines," Ahmed said. The company expects to touch a net profit of Rs.100 crore in the current fiscal, he said. (IANS)