Hindustan Zinc to create separate companies

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Hindustan Zinc to create separate companies

Hindustan Zinc Ltd on Friday said it plans to create separate companies for its zinc, lead, silver and recycling business to unlock potential value and will appoint external advisors for a comprehensive review of its corporate structure.

Vedanta Ltd is also planning to split its commodities businesses into four companies for better valuations.

Vedanta Chairman Anil Agarwal said last month that the company would consider separately listing all or some of its businesses.

HZL's Board of Directors has approved a committee of directors to evaluate and recommend options and alternatives to them. The shares of Hindustan Zinc rose as much as 5 percent after the company announced a major boost in the stock market.

In a securities filing, HZL listed the strategic objectives outlined by the Board of Directors for carrying out such an exercise:

Vedanta Ltd, the UK-based parent of Vedanta, has been struggling to raise funds due to poor ratings and concerns about meeting its debt obligations.

Agarwal's plan was to trim the group's debt by allowing Hindustan Zinc, a unit of Vedanta Ltd, to buy some of the parent company's zinc assets in a $2.98 billion deal. But the central government, which owns almost 30 per cent of Hindustan Zinc, has sided with the move.

The Indian government is the biggest minority shareholder in Hindustan Zinc, with a 29.54% share, while Vedanta owns 64.9%.