Sterlite buys out residual HZL pie for Rs 324 crore

Sterlite Industries has acquired an additional 18.92 per cent stake in Hindustan Zinc (HZL) from the government for a consideration of Rs 324 crore. This acquisition has taken Sterlite's share holding in HZL company to 64.92 per cent.

The shares were acquired by Sterlite Opportunities and Ventures (SOVL), a 100 per cent subsidiary of Sterlite Industries, at Rs 40.51 per share, as a result of the company exercising the call option in August.

Tarun Jain, director-finance, Sterlite Industries told Business Standard, "At the time of purchase, the company had a contractual agreement with the government for the acquisition of an additional 18.92 per cent stake within one-and-a-half year. We had decided to exercise that option in August and have completed the formalities of the acquisition today."

The acquisition of additional shares was partly funded through internal accruals, with the balance being covered by the capital raised through the issue of $50 million worth foreign currency convertible bonds, Jain said.

Sterlite had acquired a 46 per cent stake in HZL from the government as a result of the divestment in April 2002.

A capacity expansion of zinc and lead at HZL is on the cards at an estimated investment of Rs 1,500 crore, which would double the existing production capacities. The expansion plan also included a substantial increase in the mining capacities and a 150 MW coal based thermal power plant. HZL at present has a capacity of 1.69 lakh tonne per annum.