The Vedanta Group is hopeful it can amiably resolve its differences with the Indian government over plans to sell Skorpion Zinc in Namibia as part of a larger disposal of its international zinc operations.
“In the past, we have been able to resolve matters within the ambit of both the parties and I believe that we will be able to resolve this (issue) too,” Vedanta chief executive officer Sunil Duggal, who was previously CEO of Hindustan Zinc.
The proposed transaction, valued at N$51.5 billion (US$2.98 billion) in cash, will see Vedanta’s 100% stake in HL Zinc Namibia holdings and 69.6% stake in Black Mountain Mining sold to Hindustan Zinc Limited.
This proposed transaction will allow Hindustan Zinc to acquire two major zinc operations, Skorpion Zinc in Namibia and Black Mountain Mining in South Africa, and expand its international footprint.
However, the Indian government which is a 30% shareholder in Hindustan Zinc, with Vedanta owning the majority 65% stake, is reported to have flagged the high valuation of the assets—mainly mining assets in South Africa and Namibia – a key reason of the government’s dissent.
Duggal,however, claims the valuation of the assets under sale were undertaken in a transparent and fair manner and the group had engaged Mazars, an audit and accounting firm of international repute, to do the initial valuation.
“To provide further comfort to the government and investors, we also got it (the valuation) vetted by SBI Capital Markets,” he said
Through this transaction, Hindustan Zinc will be able to grow and expand its overseas presence, taking its brand global.
The deal is significant for Vedanta’s billionaire-owner Anil Agarwal, who is seeking to simplify the corporate structure of his commodities empire and reduce Vedanta Resources’ debt.
