Mines Ministry Rejects Vedanta’s Proposal To Split Hindustan Zinc

The mines ministry has rejected a proposal to split Vedanta Group’s Hindustan Zinc Ltd into separate entities, a top official said on Friday.

With a stake of 29.54 percent, the union government has the largest minority shareholder in Hindustan Zinc.

“We have not agreed to the proposal,” Mines Secretary V L Kantha Rao told reporters on the sidelines of a function here.

Hindustan Zinc had earlier announced its plans to spin off the business into separate entities, including zinc and silver, to increase its market capitalization.

The secretary said this while inquiring into the reasons for the rejection of the motion “Whatever report we have in front of us we are not convinced as a shareholder.”

Hindustan Zinc had earlier said it had hired a leading consultancy to study plans to break up its business.

He said that the board of Hindustan Zinc Company had decided to undertake this earlier “comprehensive review of its corporate structure for unlocking potential value”.

The move aims to create separate legal entities for zinc, lead, silver, and recycling businesses, according to a regulatory filing.

The strategic objectives outlined by the company’s board for undertaking such an exercise include unlocking value for all stakeholders and creating businesses to better invest in their unique market positions and deliver long-term growth.

Moreover, this activity aims to develop appropriate capital structure and capital allocation strategies based on business-specific dynamics and focus on core competencies and appropriate restructuring of company resources.

(With PTI Inputs)