Vedanta hopeful of govt support for Hindustan Zinc Ltd’s overhaul
The board of Hindustan Zinc Ltd (HZL) on Friday authorized a committee of directors to review and recommend options for separate legal entities for its zinc, lead, silver and recycling businesses.
Business executives from both HZL and Vedanta said they expect government support for this move and that this will help the government ease the previously considered divestment program.
“The government is part of the consultation process. It is a big restructuring process and we expect a big value unlock, why wouldn’t the government want that,” said Ajay Agarwal, President of Finance, Vedanta. The Indian government has a 29.54 percent stake in Hindustan Zinc.
“The management, together with the appointed advisors, will recommend the final structure/arrangement to the Board of Directors, which includes the Government of India, for further approval. Further, we believe that the proposed exercise will facilitate disinvestments by the Indian government,” said Arun Misra, CEO of HZL.
Past examples of the Indian government objecting to Vedanta’s corporate actions include an example in January this year, where Vedanta’s board of directors approved a sale of its Zinc International assets to a proposed wholly owned Hindustan Zinc approved for $2.98 billion.
The deal later fell through amid strong opposition from the Indian government.
First print: September 29, 2023 | 9:12 pm IST