THL: Center’s blow to Vedanta group… Will take legal action on selling stake in THL.

Vedanta Group’s debt reduction plans have suffered a major setback. To reduce debt, the group is preparing to sell its zinc manufacturing unit. On the other hand, the Government of India says that it will oppose this sale.

Vedanta Group wants to sell THL to its subsidiary Hindustan Zinc for $2.98 billion. The deal was to be completed in several phases over a period of 18 months. The government has threatened legal action to stop Vedanta from selling the unit. The government holds 30 per cent stake in Hindustan Zinc. Vedanta holds 64.92 per cent. Hindustan Zinc has given a copy of the government’s letter to the stock exchange, in which the government has said that it will explore all legal avenues if the company goes ahead with the deal.

Was a government company till 2002

Hindustan Zinc was a government company till 2002. In April 2002, the government bought 26 per cent stake in Sterlite Opportunities and Ventures Ltd. was sold for Rs 445 crore. This gave the management control of the company to the Vedanta group.