March 12 (Reuters) – The Indian authorities might put a plan to promote a part of its stake in Hindustan Zinc (HZL) on maintain (HZNC.NS) except the corporate calls off the practically $3 billion money acquisition of two Vedanta Group subsidiaries, a senior authorities supply stated.

The authorities is the most important minority shareholder in HZL with a 29.54% stake within the firm, whereas Vedanta owns 64.9%.

The authorities had deliberate to promote a part of it within the 2022/23 fiscal 12 months ending March 31, which might assist it to attain its 500 billion rupees ($6.10 billion) divestment goal for the 12 months.

In January, HZL’s board authorised shopping for Vedanta Group’s zinc companies for $2.98 billion.

“Investors need certainty about the deal and till a finality is reached, the government may not go ahead with its planned offer for sale,” the supply stated on situation of anonymity.

An e mail despatched to a finance ministry spokesperson outdoors enterprise hours didn’t instantly elicit a response.

The authorities has solely garnered 311 billion rupees from stake gross sales in public sector corporations thus far in 2022/23 and deferring the HZL share sale might result in it lacking its divestment goal.

To underscore its opposition to the deal, the federal government wrote a letter to the Securities and Exchange Board of India saying that regardless of being the most important minority stakeholder within the firm, it was “kept in the dark” in regards to the related-party transaction.

In a separate letter addressed to HZL, a duplicate of which was despatched to the exchanges, the federal government had threatened authorized motion if the corporate proceeds with the all-cash deal.

The proposed deal between HZL and Vedanta has additionally spooked traders, resulting in a drop in HZL’s share worth.

From its 2023 excessive of 383 rupees, the shares have dropped round 20% to 304.4 rupees as of Friday.

($1 = 81.9600 Indian rupees)

Reporting by Nikunj Ohri; Editing by Swati Bhat and Jamie Freed

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