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Vedanta sells select zinc assets to HZL for 2.98 billion dollar

Jan 20, 2023

By: BlinkX Research Team

Vedanta Ltd, owned by Anil Agarwal, approved the sale of its global zinc assets located in South Africa and Namibia to Hindustan Zinc Ltd for a consideration of $2.98 billion. Incidentally, HZL is a subsidiary of Vedanta Ltd. The entire payout for the deal would be made in cash and the deal is expected to be completed in 18 months, subject to receipt of regulatory and shareholder approval. Post the deal, THL Zinc, which holds the global zinc assets, will become a 100% subsidiary of HZL.

Incidentally, Hindustan Zinc also declared its Q3FY23 results on Thursday, 19th January; reporting 19% lower profits at Rs2,156 crore. Profits were also lower on a QOQ basis. Top line revenues were also lower by 2% at Rs7,628 crore. While zinc production fell by 1.7% YoY due to the unavailability of quality ores, silver production also fell 7% in the quarter. In a way, the demand for zinc got impacted by high inflation, a spike in interest rates and weak demand from China. With China finally exiting its zero-COVID policy, zinc prices have started moving up again.

Zinc also was up against a 12.7% spike in the cost of production, on account of higher prices of coal and other input commodities. Zinc production cost was also hit by the lower domestic availability of coal. The board of Hindustan Zinc Ltd has approved its third interim dividend of Rs 3 per share for FY23. Hindustan Zinc pays bulk of its dividends to Vedanta Ltd. Government has hinted at selling the balance stake in HZL also to Vedanta, but exact dates are not available.

Source: Multiple News Websites