HZL board may consider Rs 15,000-cr dividend to govt in Feb

The board of Hindustan Zinc Ltd (HZL), a Vedanta group firm, is likely to deliberate next month on the issue of Rs 15,000-crore dividend payout to the government for the ongoing fiscal.

The government has demanded dividend from HZL as the partly state-owned mining firm is sitting on surplus cash reserve.

"Hindustan Zinc has intimated the Mines Ministry that it will bring the matter (of dividend payout) before its board for its consideration," a source privy to the development said, adding that ultimately the authority to take the final call lies with the board.

The board meeting of Hindustan Zinc is likely to be held on February 10, sources said.
 

In 2002-03, the government sold its 64.92 per cent stake in HZL to mining baron Anil Agarwal-led Vedanta Resources, while retaining 29.54 per cent.

The company is sitting on about Rs 25,000-Rs 30,000 crore of surplus cash, a company official said.

Last year, Hindustan Zinc had announced that it will pay Rs 10,141 crore as dividend, which includes Rs 3,000 crore to the government, to its shareholders for the 2015-16 fiscal, the highest by any private company.

HZL CEO Sunil Duggal had informed that the firm's Board has declared a special golden jubilee dividend at the rate of 1,200 per cent -- Rs 24 per equity share of Rs 2 each -- for 2015-16 fiscal.

"Since 2002 (disinvestment of HZL), the firm has paid Rs 32,500 crore to the government in terms of royalties, direct and indirect taxes, dividend distribution tax, etc. And if the dividend tax on dividend announced today is included, this contribution would go up to Rs 34,500 crore," Duggal had said.

Meanwhile, in a statement, HZL had said the special dividend is in addition to the first interim dividend paid (Rs 3.80 per share or 190 per cent) in October 2015 of Rs 1,932 crore, including dividend distribution tax.

A subsidiary of Vedanta Ltd, HZL is an integrated producer of zinc-lead and a leading producer of silver.

The Udaipur (Rajasthan)-headquartered firm has zinc-lead mines at Rampura Agucha, Sindesar Khurd, Rajpura Dariba, Zawar and Kayad and primary smelter operations at Chanderiya, Dariba and Debari, all in the state of Rajasthan as well as finished product facilities in Uttarakhand.