Vedanta to save 11.3% on new offer for HZL, Balco:Career Prospect

vedanta-careersThe Anil Agarwal-led Vedanta Resources Plc has proposed to extend its offer to the government for picking up the latter’s residual stake in Hindustan Zinc (HZL) and Balco.

The UK-listed conglomerate has sought fresh shareholder approval to acquire the government’s minority equity interests in the two firms for an aggregate Rs 21,633.70 crore.

The terms of the offer and the payout consideration remain the same.

However, should the government accept the deal, the company is likely to save 11.3% in dollar terms on account of rupee depreciation.

According to its circular and notice of general meeting to shareholders, the company will pay the rupee equivalent (at an exchange rate of 62.13 rupees per dollar) of $2,995 million for acquiring a maximum of 29.5% government stake in Hindustan Zinc and $487 million to acquire a maximum of 49% minority interest of the government in Balco.

The total consideration works out to $3,482 million.

That’s 11.3% lower than the company’s earlier provision of $3,929 million (Rs 21,633.70 crore at an exchange rate of 55.06 to the dollar). The consideration, including $3,379 million towards the HZL stake and $550 million towards the Balco stake, had got shareholder approval in August 2012.

To be sure, the approval, if received from shareholders, will be just an enabling one and would not mean that the company will necessarily acquire all or any part of the GoI’s interests in HZL and/or Balco.

Vedanta holds 51% stake in Balco and 64.92% stake in HZL through its unit Sesa Sterlite.

Though the group has been eyeing the government’s residual stake for the last two years, it has been facing legal hurdles with the ministries of mines and law seeking legislative amendments post grant of Cabinet approval to offload the government’s stake. (Source:DNA)

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