Mines Secretary: Government Rejects Hindustan Zinc’s Plan To Split Co

According to a senior official on Friday, the Vedanta group’s unit, Hindustan Zinc Ltd. proposed splitting the business into separate firms, but the mines ministry rejected the idea. With a 29.54 percent ownership stake in Hindustan Zinc, the government is the company’s biggest minority stakeholder.

Reporters were informed by Mines Secretary V L Kantha Rao, “We have not agreed to the proposal,” outside of an event held here. In an effort to boost its market valuation, Hindustan Zinc has previously declared its intention to split out its operations into several companies, including those that deal with zinc and silver. “Whatever report we have in front of us, we are not convinced as shareholders,” the secretary said when questioned about the rationale for the proposal’s rejection. Prior to this, Hindustan Zinc said that it had engaged a reputable consulting firm to review its intentions to spin off the company.

Prior to now, Hindustan Zinc announced that a “comprehensive review of its corporate structure for unlocking potential value” would be carried out by the board of the firm. The goal of the action is to establish distinct legal entities for enterprises involved in recycling, zinc, lead, and silver, as per a regulatory filing.

The board of the firm set out the strategic goals for carrying out this kind of activity, which included building companies that are better positioned to capitalize on their unique market positions and generate long-term development, as well as unlocking value for all stakeholders. Additionally, the move intends to sharpen emphasis on core capabilities and suitable realignment of the company’s resources, as well as establish appropriate capital structure and capital allocation policies based on business-specific dynamics.