The Centre has expressed displeasure and is opposed with the move of Hindustan Zinc buying out Vedanta’s global zinc assets (mines) at a deal valued at nearly $3 billion. Hindustan Zinc is a Vedanta-subsidiary with the latter holding nearly 65 per cent.
The Centre is a minority shareholder with a 29.5 per cent stake in the company and has plans to divest its stake in the miner.
Unlocking value
According to sources, the Ministry of Mines has reportedly expressed unhappiness over the valuation of the deal and plans to raise the issue at available fora – including Board meetings.
In fact, it was said government nominees — who are also on the Board of Hindustan Zinc — raised objections to the buyout during the company’s Board meeting in January, as well. Objections came on grounds that the decision to buyout Vedanta’s international mines went against the interest of minority shareholders.
However, Hindustan Zinc management argued that the supposed deal would unlock value, monetise the international zinc assets and also create substantial synergies. It would also give them significant global access, including entry into new markets.
It is now being said the Vedanta-owned company went ahead with exchange filing despite the objections. businessline has reached out to Hindustan Zinc for comments. Till the time of press, the company was yet to respond on the matter.
The Hindustan Zinc Board comprises Priya Agarwal Hebbar – Anil Agarwal’s daughter – who is currently the Chairman; Arun Misra, the CEO; and Navin Agarwal, apart from the joint secretary level officers of the Minisrty of Mines — Veena Kumari, Dermal and Farida M Naik. It also includes Joint Secretary and Financial Advisor Ministry of Coal and Ministry of Mines, Nirupama Kotru.
Other board members include Akhilesh Joshi — former CEO of Hindustan Zinc (2012-2015); Anjani K Agrawal and Kannan Ramamirtham.
Post the results, during an analyst call, the management was asked as to how will the government stake be considered and whether they gave their in principle approval for the transaction.
Responding to the question, the company’s top brass had said: “This (the buyout) is approved by the Board. And of course, the Board approval follows approval or recommendations by the audit committee. And for further course of actions, all due approvals will be sought wherever required as per the law.”
“When we say Board approval, we don’t see individually which director opined what. But we can see overall, the Board has approved it,” the management said during the analyst call.