Metals and mining major Vedanta Ltd on Tuesday announced that its committee of directors has approved the sale of up to 11 crore shares or 2.6% equity in Hindustan Zinc via an offer for sale (OFS).
“We wish to inform you that the duly authorised Committee of Directors of Vedanta Limited, at its meeting held today on August 13, 2024, has approved the sale of up to 11,00,00,000 equity shares of Hindustan Zinc, representing 2.60% of the issued and paid-up equity share capital of HZL, by way of an offer for sale through the stock exchange mechanism,” Vedanta said in a regulatory filing.
The company has not yet announced the date of the OFS.
Ahead of the announcement, shares of Hindustan Zinc ended 4.57% lower at Rs 586.35 on BSE while Vedanta also ended over 2% lower at Rs 422.7 on BSE.
At the end of the June quarter, Vedanta owned 64.92% stake in HZL while the government had 29.54%.
Vedanta plans to demerge its aluminium, oil and gas, power, base metals, and iron and steel businesses into separate listed entities. This demerger aims to reduce refinancing risks and reliance on dividends from Vedanta Resources Ltd (VRL).
ET had recently reported that HZL is likely to announce a special dividend of Rs 6,000 crore to its shareholders this month. Last month, the National Company Law Tribunal (NCLT) had approved the transfer of Rs 10,383 crore from the company’s general reserves to retained earnings.
Vedanta, which holds a 64.92% stake in Hindustan Zinc, will receive Rs 3,895 crore in the event of the dividend payout and may use the special dividend to cut debt.
