India's Hindustan Zinc to spin off commodities into separate companies

BENGALURU, Sept 29 (Reuters) - Hindustan Zinc (HZNC.NS) on Friday said it plans to create separate entities for its zinc, lead, silver and recycling businesses to unlock \“potential value\” and will appoint external advisors to review its corporate structure.

Shares of Hindustan Zinc surged as much as 6.6% after the announcement, while parent Vedanta Ltd (VDAN.NS) jumped as much as 7.8%

Hindustan Zincs plans come at a time when Vedanta Ltd is also planning to separate its commodities businesses into multiple companies for better valuations.

The company, which is valued at 1.2 trillion rupees ($14.45 billion), wants to broaden its investor bases and sharpen its focus on its core businesses, the company said in a filing with exchanges.

Vedanta Chairman Anil Agarwal last month said the company will consider separately listing all or some of its businesses.

Vedanta Resources, the UK-based parent of Vedanta Ltd, has been struggling to raise funds due to rating downgrades and concerns about meeting its debt obligations.

Agarwal sought to trim the groups debt by getting Hindustan Zinc, a unit of Vedanta Ltd, to buy some of the parent groups zinc assets in a $2.98 billion deal. However, the Indian government, which owns nearly 30% stake in Hindustan Zinc, opposed the move.

The Indian government is the largest minority shareholder in Hindustan Zinc with a 29.54% stake, while Vedanta owns 64.9%.

($1 = 83.0575 Indian rupees)