By Sethuraman N R and Manvi Pant
(Reuters) -India’s Hindustan Zinc is discussing the possibility of splitting the company into two units with the Indian government, which is opposed to the proposal, CEO Arun Misra said on Friday.
“We are discussing all the issues (regarding the split) with the government. Whenever both the sides agree, it will happen,” Misra said in an analyst call.
The government’s proposal to sell a stake in the company is also going on, Misra said.
The company’s comments comes after India’s government, the miner’s largest minority shareholder, had rejected its proposal to split into different units in March, saying it was not convinced such a move would boost shareholder value.
Last year, the company said it planned to create separate entities for its zinc, lead, silver and recycling businesses to unlock “potential value.”
Misra also said that the company is inviting discussions with global mining contractors to start mine development as it aims to double its output to 2 million ton per annum, adding that the contract should be fixed by November.
“The company may look for some debt, equity (funding) as it goes for a 2 million ton expansion,” chief financial officer Sandeep Modi said in the call.
The company on Friday reported better-than-expected second-quarter profit, helped by gains in zinc prices.
Consolidated net profit rose about 35% from a year ago to 23.27 billion rupees (around $277 million) in the quarter ended Sept. 30, compared to analysts’ expectations of 22.51 billion rupees according to estimates compiled by LSEG.
Hindustan Zinc said its revenue from operations grew 21% to 80.04 billion rupees, also beating expectations for 79.99 billion rupees.
Its second-biggest business segment, silver, clocked a 20% growth in revenue. Hindustan Zinc is the world’s third-biggest producer of the metal.
The company’s parent firm, Vedanta, is set to report its quarterly earnings later in the month.
($1 = 84.0420 Indian rupees)
(Reporting by Manvi Pant in Bengaluru; Editing by Subhranshu Sahu and Varun H K)
