Indian Govt receives Rs.3k cr dividend from HZL
Hindustan Zinc limited (HZL) paid Rs.3,000 crore to the government as special dividends to help them meet the budget targets.
Anil Agarwal the mining mogul of Hindustan Zinc declared “a special golden Jubilee dividend” on March 30, at the rate of 1,200 per cent. A 24 rupees’ equity share of Rs 2 each for the period 2015-16 while the Indian government holds 29.54 percent shares in HZL.
The CEO of Hindustan Zinc, Tom Albanese gave a Rs.2,995 crore cheque to the Finance minister Arun Jaitley towards the dividend.
Agarwal earlier said that, “The government was looking for (resources for) their budget and we also wanted to go with them. So, we have given a very handsome dividend. The government will get Rs 3,000 crore in dividend and another Rs 2,000 crore in taxes. So, the government coffer got Rs 5,000 crore overall.”
Agarwal in an interview with the PTI informed that, he saw the government as a partner and this move was intended to help them meet the deficit in the budget.
Talking about the dividend payout, Albanese said, “It is a very good practice. After we did that, our share price has done well.” He also pointed out that the privatization of the HZL has benefited the Indian economy on a larger scale.
Albanese said that, “In the 14 years of HZL privatization, it has been enormously successful in becoming the best zinc business in the world, bar none. This has been good for the shareholders of Hindustan Zinc, of course with this dividend.”
Proudly revealing the fact that, “We chose a world-class resource and operate with Indian world-class management team with world-class technologies and deliver world-class results. Our discussion focused around a very large dividend.”
He also added that, “There was all this money (with HZL). We have been wanting to do this (pay dividend) for a long time. And the government too was looking at their books (for meeting deficit). When dividend is paid, the government gets 30 per cent and I (Vedanta) keep 70 per cent.”
Vedanta group, held by Agarwal holds 64.92 percent in HZL and will earn Rs. 6,583.57 crore from the dividend. This dividend will help Vedanta in paying off some of their debts as the gross debt of the company by the end of December was Rs. 80,952 crore.
On the whole a debt of $1.2 billion is nearing repayment in 2016-17. An inter-company debt of around 1.25 billion dollars is also coming up for its repayment in the next few months. Cairn India lent a loan of $1.25 billion loan to Sesa Sterlite, which was later renamed as Vedanta Ltd.
59.88 per cent of the stake in Cairn limited is held by Vedanta Ltd.
