Government rejects Hindustan Zinc division bid proposal

by Psu Connect
Date: 26-03-24

The recent contemplation of Hindustan Zinc to divide its operations into separate units for zinc, lead, silver, and recycling was hampered by government citings which prompted regulatory scrutiny.

The Indian government has rejected Hindustan Zinc's proposal to split the company without prior consultation raising the concerns for shareholder value. The recent contemplation of Hindustan Zinc to divide its operations into separate units for zinc, lead, silver, and recycling was hampered by government citings which prompted regulatory scrutiny.

The Indian government has reportedly declined Hindustan Zinc's proposal to split the company into separate units, according to the recent official data. The government was not consulted when the company decided to divide its operations, including zinc, lead, silver, and recycling businesses despite the 29.54% shareholding stakes.

The argument has been sought to be declined by the government which raises concerns for the shareholder's niche. The company is arguing to evolve new leash outs and potentially break endurance in the future. The Ministry of Mines, impeding Hindustan Zinc, has conveyed its objections to the company.

Earlier, also the government has touted opposition to Hindustan Zinc's bid to acquire two Vedanta entities, prompting the company to abandon the plan. Vedanta currently holds a 64.9% stake in Hindustan Zinc.

The decision to split the firm into separate entities for various reasons and opportunities could have resulted in a dilemma for both shareholders and the broader market. By communicating its objections to the company, the government asserts its authority and ensures that corporate actions align with broader policy objectives.

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