HZL pays govt Rs 3,000 cr in special dividend

Mining mogul Anil Agarwal-led Hindustan Zinc Ltd today paid the government about Rs 3,000 crore in special dividend, which the London-based billionaire described as helping the government meet budgetary targets.
HZL had on March 30 declared a "special golden jubilee dividend" at the rate of 1,200 per cent -- Rs 24 per equity share of Rs 2 each for 2015-16.
The government holds 29.54 per cent in HZL and its CEO Tom Albanese handed over a cheque of Rs 2,995 crore to Finance Minister Arun Jaitley towards the dividend.
In an interview to PTI earlier this month, Agarwal had said he saw the government as a partner and the move is aimed at helping it meet the budgetary deficit.

"The government was looking for (resources for) their budget and we also wanted to go with them. So, we have given a very handsome dividend. The government will get Rs 3,000 crore in dividend and another Rs 2,000 crore in taxes. So, the government coffer got Rs 5,000 crore overall," he had said.
His group firm Vedanta Ltd holds 64.92 per cent of HZL and will be richer by Rs 6,583.57 crore from the dividend.

The dividend will help Vedanta Ltd pay off some of its debt. At the end of December quarter, it had a gross debt of Rs 80,952 crore. Of this, USD 1.2 billion loan is coming up for repayment in 2016-17.

Also, an inter-company loan of USD 1.25 billion is also due to be paid in the next few months. In July 2014, Cairn India had extended USD 1.25 billion of loan from its cash pool to Sesa Sterlite, which was later renamed Vedanta Ltd.
Vedanta Ltd holds 59.88 per cent stake in Cairn India.
"In the 14 years of HZL privatisation, it has been enormously successful in becoming the best zinc business in the world, bar none. This has been good for the shareholders of Hindustan Zinc, of course with this dividend," Albanese said.
HZL privatisation has been very good for the economy of Rajasthan and of India, he said. "We choose a world-class resource and operate with Indian world-class management team with world-class technologies and deliver world-class results. Our discussion focussed around a very large dividend," he added.

Asked about the rationale for the dividend payout, Agarwal said, "It is very good practice. After we did that, our share price has done well."
The HZL stock rose to Rs 188.25 on April 4 from Rs 169.8 closing on March 29 on BSE. It closed at Rs 160.10 today.
"There was all this money (with HZL). We have been wanting to do this (pay dividend) for a long time. And the government too was looking at their books (for meeting deficit). When dividend is paid, the government gets 30 per cent and I (Vedanta) keep 70 per cent," he had added.