Vedanta hopeful of Centre's support for Hindustan Zinc Ltd overhaul

Hindustan Zinc Ltd (HZL)’s board on Friday authorised a committee of directors to evaluate and recommend options for separate legal entities for the zinc, lead, silver, and recycling business.

Company executives from both HZL and Vedanta said they expect government support for the move and it will help the government ease in with its earlier considered divestment programme.

“The government is part of the consultation process. It is a major restructuring process and we expect a major value unlock, why would the government not want to,” said Ajay Agarwal, president -of finance for Vedanta. The Indian government holds 29.54 per cent stake in Hindustan Zinc.

“The management along with the appointed advisors will recommend the final structure/scheme for further approval to the Board of Directors which includes the government of India. Further, we believe that the proposed exercise will ease disinvestment by the Government of India,” said Arun Misra, chief executive officer for HZL.

Past instances of the Indian government objecting to Vedanta’s corporate actions include one in January this year, where Vedanta’s board approved a sale of its Zinc International assets, to a proposed wholly-owned unit of Hindustan Zinc for $2.98 billion.  

The deal later fell through with strong resistance from the Indian government.