Hindustan Zinc CEO Says, Will 'Continue To Engage With The Government' On Demerger Proposal
Hindustan Zinc CEO Arun Misra states the company will continue engaging with the government on its proposal to split into different entities, amid the mines ministry rejecting the demerger plan.
Vedanta group company Hindustan Zinc will continue to engage with the Centre on its proposal to split the company into different entities, a top official said. The statement comes amid the mines ministry rejecting Hindustan Zinc Ltd's demerger plan.
Speaking with PTI, Hindustan Zinc CEO Arun Misra said that the matter had also come up for discussion in the board meeting on Friday.
"I again explained (the board) the situation and I promised that I would continue to engage with the government and try to explain our logic and why we want to do it," he said.
The government, the largest minority shareholder in Hindustan Zinc, owns a 29.54% stake in the company.
Misra further said that "they (government) are in the process of disinvestment through various routes and they feel that at this time doing demerger will jeopardise that opportunity of disinvestment."
The company, he said, is still in talks with the mines ministry on the proposal and is trying to address some issues.
"We still believe that with silver prices as high as of today and if we had a silver company separately our market cap which is about 20 billion dollars now would have surely become 24-25 billion dollars and everyone would have gained through that including the Government of India," he explained.
Hindustan Zinc had earlier announced plans to spin off its businesses into separate entities, including zinc and silver, to increase its market capitalisation.
Mines Secretary V L Kantha Rao had earlier said, "Whatever report we have in front of us we are not convinced as a shareholder."
Hindustan Zinc had earlier that it has engaged a leading advisory firm to study its plans to spin off the business.
It had said the company's board decided to undertake a 'comprehensive review of its corporate structure for unlocking potential value'.
Hindustan Zinc is engaged in zinc, lead and silver businesses. In the fourth quarter of the last fiscal, the consolidated sales from the zinc vertical were at Rs 4,858 crore, Rs 1,360 crore from silver vertical and Rs 961 crore from lead segment.