The centre is expected to investigate legal alternatives in connection with Vedanta’s selling of its zinc international assets owned by THL Zinc Ventures to a Hindustan Zinc Limited subsidiary.
The federal government, which owns 29.54 percent of Hindustan Zinc, has repeated its opposition to the sale. According to the article, the centre has likely instructed the corporation to investigate alternate cashless means of acquisition.
Vedanta Limited announced on January 19 that its board of directors has approved the proposed sale for a cash consideration of $2,981 million.
“…considered and approved the proposed sale of its Zinc International assets held by THL Zinc Ventures Ltd. (Mauritius), a direct wholly owned subsidiary of the company… to the proposed wholly owned subsidiary of Hindustan Zinc Limited, another listed subsidiary of the company, for a cash consideration not exceeding $2,981 million (in a phased manner based on agreed milestones),” the company said in a regulatory filing.
However, the government has objected to the purchase, claiming that it is detrimental to minority shareholders and breaches corporate governance standards.
The opposition has also cast doubt on Vedanta’s subsidiary Hindustan Zinc’s possible offer for sale (OFS) in the current fiscal year.
Brokerages have also warned that the high valuation might have an impact on the stock price. The government is counting on Hindustan Zinc’s OFS to help it reach its divestment objective for the current fiscal year.
According to Hindustan Zinc CEO Arun Misra, the government is a significant stakeholder, and any board move will require the approval of a majority of minority shareholders.
He said that the board will decide the next step if the sale does not go through within three months after convening a shareholder meeting and seeking approval.