Mining company Vedanta Resources Limited has a 5 per cent cap in Hindustan Zinc additional stake, the company’s founder and chairman Anil Agarwal said recently. This assumes importance at a time when the Union Cabinet on Wednesday gave in-principle approval for divesting stake of the central government in Hindustan Zinc. The Centre has plans to offload its 29.5 per cent residual stake in the company, sources have told news18.com.
Vedanta chairperson Anil Agarwal, who recently spoke to CNBC-TV18’s Shereen Bhan about the sale of the Government’s residual stake in the Hindustan Zinc, also said that he was waiting for the government’s announcement on the matter. “We know just as much as you do. We are waiting for the government’s announcement,” said Agarwal when asked regarding the wheels finally moving on the Hindustan Zinc divestment.
When asked if the funding was ready for buying Hindustan Zinc, the Vedanta boss said, “We are not the buyer, it will come to the market, and the market will buy. We can’t buy more than an additional 5 per cent stake in the Hindustan Zinc out of the 26 per cent.”
“Privatisation of companies like BPCL will create more value and revenue for the government. See the privatisation that happened in the UK by privatising British Airways and British Petroleum. Along the same line Government can give around 20 per cent of the Indian companies for privatisation. There is a chance of creating five times more value by doing so. This is why I am very optimistic,” he said about the BPCL divestment, which is off the charts now.
The Hindustan Zinc divestment proposal, on the other hand, was cleared by the Supreme Court in November last year. Hindustan Zinc, which is one of the largest integrated producers of zinc and lead in India, however is no longer a government company as the Centre has only a 29.5 per cent residual stake in the firm. The top court had at the time ruled that the government had the right to decide if it would divest its holdings, as long as the process was transparent and the best price was achieved.
Established in 1996, Hindustan Zinc is also the sole integrated producer of zinc-lead and silver in the country, whose majority stake was held by the Centre.. Vedanta, in 2002, had in a strategic sale from the government, acquired 26 per cent of the government’s equity in the company. Just after the initial stake purchase, the Anil Agarwal-led multinational mining-to-metals company bought another 20 per cent in the firm. This was done through an open market sale via a mandatory open offer. In August 2003 again, Vedanta acquired another 18.92 per cent stake in Hindustan Zinc. As of now, Vedanta holds 64.92 per cent in the lead metal producing company. However, that may increase further by 5 per cent if the Hindustan Zinc divestment happens.
Read all the Latest News , Breaking News and IPL 2022 Live Updates here.