Analysts have flagged the costly acquisition would run down cash reserves at Hindustan Zinc in which Vedanta holds about 65%
').insertAfter(".article-content__img");$(".article-content__img div").find('div').remove();
Govt Planning To Oppose Hindustan Zinc's Proposal To Buy Vedanta Assets
The plan was pushed through even after government officials refused to approve it, they said, adding the government is trying to nudge Hindustan Zinc to withdraw the proposal
Topics
Hindustan Zinc | Vedanta | HZL
The government is planning to oppose Hindustan Zinc Ltd.’s proposal to buy global zinc assets of Vedanta Ltd. for $2.98 billion, people familiar with the matter said.
The government, which has nearly 30% stake in Hindustan Zinc that it intends to sell through offer-for-sale mechanism, is likely to vote against the plan on concerns ranging from high valuations to it being a related party transaction, the people said, asking not to be named as the information is not public.
The plan was pushed through even after government officials refused to approve it, they said, adding the government is trying to nudge Hindustan Zinc to withdraw the proposal.
This could potentially make it harder for billionaire Anil Agarwal to use proceeds from the sale to trim debt at ultimate parent Vedanta Resources Ltd., which has bonds worth $4.7 billion maturing in the next three-and-a-half years, according to data compiled by Bloomberg.
Hindustan Zinc last month agreed to buy assets of THL Zinc Ltd. Mauritius from its parent in a phased manner over 18 months. The operations of THL include Black Mountain Mining (Pty) Ltd. in South Africa and Skorpion Zinc (Pty) Ltd. in Namibia.
Television channel CNBC-TV18 reported the government’s plan to oppose the deal earlier Monday.
Emails sent to Hindustan Zinc and Vedanta were not immediately answered, while a spokesperson for the finance ministry didn’t respond to calls and a text message seeking comments.
Analysts have flagged the costly acquisition would run down cash reserves at Hindustan Zinc in which Vedanta holds about 65%. The unit has been regularly doling out dividends to the parent, helping it further push up cash to Vedanta Resources.
©2023BloombergLP
Subscribe to Business Standard Premium
Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!
First Published: Mon, February 06 2023. 22:56 IST
RECENT NEWS
JPMorgan's Berlin Moment: Chase Takes On Europe
There is something quietly symbolic about JPMorgan Chase choosing Berlin as its gateway into continental Europe. In a fo... Read more
What Strategy's Bitcoin Sale Really Tells Us
There is a moment in every bull run when the narrative starts to fray. Not with a crash, not with a scandal, but with so... Read more
Coutts Sets Scope On New Continent
Coutts steps into private marketsCoutts, the private bank best known for serving Britain’s wealthiest families and the... Read more
From Cypherpunk To Citadel
How Crypto Moved from the Wild West to the Mainstream Financial SystemA long-form analysis of Bitcoin's journey from fri... Read more
ACB Securities: Building Scale, Trust & Innovation
ACB Securities: Building Scale, Trust and Innovation in Vietnam’s Capital MarketsACB Securities (ACBS) is emerging as ... Read more
War Risk Returns To Markets As VIX Surges
For most of the past year, global markets behaved as though geopolitical risk had largely disappeared. Inflation was eas... Read more