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India Denounces Hindustan Zinc's Acquisition of Vedanta's Global Zinc Assets: OFS in Peril
India Denounces Hindustan Zinc's Acquisition of Vedanta's Global Zinc Assets: OFS in Peril

India Denounces Hindustan Zinc's Acquisition of Vedanta's Global Zinc Assets: OFS in Peril

  • 07-Feb-2023 11:35 AM
  • Journalist: Gabreilla Figueroa

New Delhi [India]: The Indian government is opposing Hindustan Zinc's potential acquisition of Vedanta's global Zinc assets, throwing the planned Offer for Sale (OFS) into jeopardy. The Mines Ministry has reportedly expressed their objection to this move in the upcoming Hindustan Zinc annual general meeting.

Vedanta revealed plans last month to transfer its international Zinc assets to Hindustan Zinc, its subsidiary, for a whopping $2.98 billion. According to the current shareholding pattern, Vedanta holds 64.92 percent stake in Hindustan Zinc.

Hindustan Zinc, a subsidiary of Vedanta Ltd., is set to unlock value and monetize international Zinc assets. This venture is expected to create substantial synergies while simultaneously providing substantial financial and organizational benefits.

Despite objections from the government-appointed directors on Hindustan Zinc's board, the company went ahead with filing an exchange to go through with its $2.98 billion buyout. The Indian government currently holds a 29.5 percent stake in Hindustan Zinc and is looking to divest this stake during the current financial year.

The government has concluded that Hindustan Zinc's Offer for Sale is not possible until Vedanta's decision, which goes against the rights of minority shareholders and fails to meet corporate governance norms, is addressed.

The stock of Vedanta touched the day's bottom, dropping as much as 2% to Rs 305. On the other hand, Hindustan Zinc shares have recovered from the intraday low, trading 1.2% lower at Rs 344.75 currently.

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