However, its latest idea of allowing National Aluminium to convert half its equity into debt is unlikely to draw such criticism. The centre holds 87 per cent stake in the aluminium producing giant and has decided not to hold the debt instruments that it would be entitled to. Instead, the debt would be allotted to banks and financial institutions by way of a private placement. As the six-year NCDs, besides offering the advantage ofa superior quality asset, would carry an attractive coupon of 14.5 per cent per annum payable half-yearly, that the subscribers stand to benefit is clear enough. The government, for its part, would be able to garner around Rs 535 crore through the process.

How does National Aluminium benefit? Well, the company itself has been clamouring for a capital restructuring to convert part of its bloated equity into debt. Whether it is the government or some other agency that holds the major chunk of the debt resulting from the conversion is a non-issue as far as the company is concerned. With an improvement in its capital structure, it can expect to better serve the interests of all stakeholders -- including the minority shareholders who will compulsorily also become debenture holders.