## Hindustan Zinc's Restructuring Plans and Government Stake Sale
Hindustan Zinc Limited (HZL) CEO Arun Misra announced that the government will announce an offer-for-sale (OFS) for the company within the next three months. This follows the company's proposed corporate restructuring in September 2023, aiming to create three distinct verticals for zinc and lead, silver, and recycling operations.
Misra expressed hope that the government will proceed with the OFS in the current quarter, highlighting the current high metal prices as a "golden opportunity." He believes the restructuring would optimize operational efficiency and enhance focus on key business segments.
The OFS is a mechanism where promoters sell their shares directly to the public. Vedanta, the majority shareholder in HZL with a 64.92% stake, and the government, with a 29.54% stake, would participate in the OFS.
The government had previously rejected HZL's proposal to split into different units, citing concerns about shareholder value. However, Misra urged the government to complete the divestment process, stating that the market is ready and shareholders have been waiting for a long time.
The government plans to sell only 3.5% of its stake in HZL, retaining the remaining 26% to maintain control and shareholder rights.
Meanwhile, HZL reported a 21% decline in profit after tax (PAT) for the March 2024 quarter due to lower zinc prices. The company aims to invest $270-325 million in capital expenditure in FY2025, with potential debt financing to leverage favorable costs. HZL anticipates increased production of both mined and refined metal in FY25 compared to FY24.
Additionally, HZL was ranked as the third largest silver producer worldwide according to the 2024 World Silver Survey.