Vedanta sells stake in Canada's Hudbay Minerals for $152 mn
New Delhi: Vedanta Resources has exited from Hudbay Minerals Inc by selling its 9.5 percent stake in the Canadian mining firm for about USD 151.8 million.
Vedanta had acquired about 14.5 million shares or 9.5 percent stake in Hudbay Minerals, through a privately-held Netherlands-based subsidiary Lakomasko BV for an undisclosed sum.
Later, it was speculated that Vedanta may use the company as its gateway to North America and may even go for acquiring the company.
However, in its annual report for the last fiscal, Vedanta said that "during the year ended March 31 2013, the Group disposed its investment in Hudbay Minerals Inc for a consideration of USD 151.8 million", but did not give any reason for the exit.
A Vedanta spokesperson could not be reached for comments on the matter.
Industry sources said Vedanta sold its stake in December itself due to fall in commodity prices and poor global macro-economic conditions.
Besides, Vedanta has also made some other acquisitions in the American continent like acquiring Anglo American Plc's zinc assets in 2010 and the Anil Agarwal-led group may not be requiring any strategic interest in companies like Hudbay Minerals for its entry into North America.
Hudbay Minerals primarily produces zinc, copper and other precious metals like silver and gold. In 2012, it had produced about 39,500 tonnes of copper and 80,800 tonnes of zinc and was sitting on a cash and cash equivalents of USD 1.3 billion.
In recent times, Vedanta's acquisition target seems to be properties in Africa. It has acquired several assets in last few years like iron ore mine in Liberia, copper mine in Zambia and zinc mines in Namibia and South Africa through its different subsidiaries.
As per media reports, last week the company pulled out from bidding for Rio Tinto's iron ore assets in Canada as it does not want to increase its financial burden.
According to Vedanta's annual report, it has to repay over USD 3.5 billion debt this year, whereas the deal for Rio Tinto's asset is estimated to be around USD 3-4 billion.