According to Arun Misra, CEO, Hindustan Zinc Ltd, the company is looking at “all kinds of proposals” and continues to work towards finding a way out.
“I still believe it is a good acquisition. And we should have explored the same. However, at this point, we continue to explore all kinds of proposals and(are) working on it,” he told businessline in an interview.
A board meeting held in January had cleared the acquisition of overseas mines of Vedanta by its subsidiary, Hindustan Zinc, for a deal valued at $2.98 billion. Acquisition was to be “for a cash consideration” in a phased-manner on the basis of agreed milestones.” Vedanta has a near 65 per cent stake in the zinc-miner.
However, the Centre – which has a near 30 per cent stake – raised objections to the proposed acquisition. Opposition came on the grounds that it was an all cash buy and valuations were too high. In fact, the management was asked to explore “other alternative ways”, which include a share swap, or similar non-cash mechanisms (to fund the buy).
Misra, during a previous analyst call had said the proposed transaction (acquisition) is an attractive opportunity for Hindustan Zinc to grow and increase its foothold overseas” and take the brand global. Hindustan Zinc officials too had reached out the Centre to ensure a smooth passage of the proposal.
“If you see, it was not the acquisition of the overseas mines that was opposed. But, the mechanism of the buy. Discussions are on,” Misra said.
Since this was a related party transaction, laws mandate that majority of the minority share-holders (in this case, the Centre) have to clear the proposal too. But, objections raised by the federal government have since stalled plans.
Asked if the deal is now called-off, Misra said, “Until there is a resolution from the Board, we cannot say that the deal is off.”
The Hindustan Zinc board comprises of Priya Agarwal Hebbar – Anil Agarwal’s daughter – who is currently the Chairman; Arun Misra, the CEO; and Navin Agrawal, apart from the joint secretary levels officers of the Ministry of Mines - Veena Kumari Dermal and Farida M Naik. It also includes; Joint Secretary and Financial Advisor Ministry of Coal and Ministry of Mines, Nirupama Kotru. Other board members include Akhilesh Joshi – former CEO of Hindustan Zinc (2012-2015) ; Anjani K Agrawal and Kannan Ramamirtham.