NEW DELHI: Vedanta Group firm Hindustan Zinc Limited (HZL) on Friday said it is in discussions with the Indian government about the possibility of splitting the company into two units. Its CEO Arun Misra, in an analyst call, mentioned that if the government, one of its stakeholders, agrees, the split will occur.
Mishra also noted that the government’s proposal to sell a stake in the company is still under consideration. Vedanta Limited, its parent company, wants to split into two to three verticals, but the government, which owns a 29.4% stake, is opposing this move.
“We are discussing all the issues (regarding the split) with the government. Whenever both the sides agree, it will happen,” Misra said in an analyst call. In 2023, Hindustan Zinc Limited (HZL) announced plans to create separate entities for its zinc, lead, silver, and recycling businesses in an effort to unlock potential value.
However, the government rejected earlier proposal to split into different units in March 2023. The government, which is the largest minority shareholder, expressed concerns that the split might not enhance shareholder value.
Misra added that HZL is in discussions with global mining contractors to begin mine development, as it aims to double its output to 2 million tonne per annum. He added that the contracts should be finalised by November. “The company may look for some debt, equity (funding) as it goes for a 2 million tonne expansion,” chief financial officer Sandeep Modi said in the call.