($1 = 81.8430 Indian rupees) (Reporting by Neha Arora and Nikunj Ohri; Editing by Savio D'Souza)
Messaging: twitter.com/nikunj_ohri)) NEW DELHI, May 2 (Reuters) - Hindustan Zinc Ltd's proposal to buy certain zinc assets from Vedanta Group
for $2.98 billion in cash has lapsed as the Indian miner did not
get shareholders' approval within the stipulated time limit,
said two government sources.
The deal was announced in mid-January, after which Hindustan
Zinc had three months to call an extraordinary general meeting
to seek approval from its minority shareholders, according to
Indian rules for listed companies.
"The issue is dead because three months have lapsed," said
the first government official.
In March, Hindustan Zinc declared a final dividend of 110
billion rupees ($1.34 billion), tying up its cash reserves
through which it was planning to fund the acquisition, the
source noted. Its consolidated gross investments and cash and
cash equivalents of 164.82 billion rupees as of Dec. 31.
The sources asked to be anonymous as they are not authorised
to speak to the media.
The Indian government is the largest minority shareholder in
Hindustan Zinc with a 29.54% stake, while Vedanta owns 64.9%.
The government had opposed Hindustan Zinc's deal to buy two
Vedanta Group entities, saying it was a "related party
transaction" and underscored its opposition to the deal being
funded through cash reserves.
Hindustan Zinc's shares prices have tumbled since the deal
was announced, which has jeopardized the government's plan to
sell part of its stake. It has since put that plan on hold.
The lapsing of the deal is a blow for Vedanta Resources, as
the billionaire Anil Agarwal-owned mining giant had planned to
pare down some of its $7.7 billion in net debt via the sale.
Hindustan Zinc, Vedanta and the federal ministries of
finance and mines did not immediately respond to Reuters emails
seeking comment.
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