"Hindustan Zinc Anticipates Mines Ministry Approval for Business Restructuring Ahead of April Board Meeting"

Hindustan Zinc, owned by Vedanta's Anil Agarwal, is facing hurdles in obtaining clearance from the Mines Ministry for its proposed business restructuring plan, aiming to create separate entities across zinc, lead, and silver verticals. Sources reveal that government-nominated directors on the company's board have yet to give their approval.

The Mines Ministry, acting as a minority shareholder, has explicitly communicated to the company that any restructuring of business operations requires their clearance. Arun Misra, CEO and Wholetime Director of Hindustan Zinc, assures that the necessary clearances are expected to be secured before the upcoming board meeting scheduled for April.

"We are working with the Mines Ministry... in all likelihood, these clearances should be in place before the next board meeting scheduled in April," stated Misra.

The Hindustan Zinc board, currently consisting of nine members with Priya Agarwal Hebbar as the Chairperson, including three government nominees, had proposed the exploration of creating separate legal entities in a September 29 meeting. The objective is to unlock shareholder value, and a committee of directors was tasked with evaluating suggestions and recommending options.

The proposed restructuring entails the creation of two distinct businesses: the first focusing on zinc and lead, incorporating recycling, while the second entity will concentrate on silver production. Over the years, recycling is planned to be established as a separate business.

Misra emphasizes that the restructuring will not alter the ownership structure but rather unlock value and lead to capital appreciation. He anticipates increased investor focus on each of the separate businesses, characterizing the restructuring as a "risk-free decision" with revenue shares, dividend outgo, and other aspects remaining unchanged.

Hindustan Zinc, where Vedanta holds a majority stake of 64.92%, with the Mines Ministry holding 29.54% and the remaining 5.54% as public shareholding, aims to navigate through the restructuring process despite previous challenges. The company had previously faced objections from the Centre over the acquisition of Vedanta's overseas zinc mines, leading to the abandonment of a $3-billion all-cash deal."

HBL