$2.98 billion outgo for Vedanta’s Zinc International assets not factored in for FY24: Hindustan Zinc

Representative Image

The proposed deal to purchase Vedanta’s Zinc International assets is subject to shareholder approval and hence the outgo has not been factored in for FY24, top executives from Hindustan Zinc Ltd (HZL) said.

In January, India-listed Vedanta’s board approved the sale of its Zinc International assets, held by wholly owned subsidiary, THL Zinc Ventures (Mauritius), to a proposed wholly owned unit of Hindustan Zinc for $2.98 billion.

The proposed deal soon hit a rough patch with the Centre opposing this deal in a strongly worded letter sent on February 20.

“This is subject to approval in the shareholders’ meeting, which has not yet happened. This is still hypothetical.  So, it has not been factored in,” said Arun Misra, chief executive officer, HZL, in an interview with Moneycontrol on April 21.Also read: Expect a very stable performance from Hindustan Zinc quarter-on-quarter: HZL CEO

The government holds a 29.54 percent stake in Hindustan Zinc. Sharing the company’s capital expenditure plans, Misra said the company will spend $175 million- $200 million in FY24.

“This will be primarily for our roaster project (in Debari, Rajasthan ) and fertiliser project. Ordering is in process and work is about to start,” he said.

On the company’s cash position, Sandeep Modi, chief financial officer of HZL, said the company should end FY24 with Rs 10,000-11,000 crore surplus cash on the balance sheet, after meeting dividend and debt repayments for the year.

Also read Hindustan Zinc to invest another Rs 438 crore in group firm Serentica

While Misra said the company does not plan to raise any debt and will fund capex requirements through internal accrual, Modi added: “Unless we feel that we are getting it at a very attractive rate, which is less than the yield from our long-term investments, (we will not raise debt)."