Hindustan Zinc to create separate companies

Hindustan Zinc to create separate companies

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

Vedanta Ltd is also planning to split its commodities businesses into four companies to get 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 authorised a committee of directors to evaluate and recommend options and alternatives to them. Hindustan Zinc shares rose 3% after the news and closed Friday at Rs 308.25 apiece.

HZL listed the strategic objectives outlined by the Board of Directors for implementing such an exercise in a stock exchange filing.

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

By using Hindustan Zinc, a unit of Vedanta Ltd., Agarwal aimed to trim the group's debt by buying some of the parent company's zinc assets in a $2.98 billion deal. The central government, which owns a majority of Hindustan Zinc shares, opposed the move.

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