Vedanta to demerge business into six separate listed firms

PTI

New Delhi, September 29

Mining magnate Anil Agarwal’s conglomerate on Friday announced a major business shake-up, with flagship Vedanta Ltd approving a spin-off of its metals, power, aluminium and oil and gas businesses into separate listed entities and an overhaul of lucrative zinc unit planned as part of value creation and reducing debt load.

Restructuring exercise

• The company’s Board has approved six separate listed companies — Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Ltd
• The de-merger is planned to be a simple vertical split, for every 1 share of Vedanta Ltd, the shareholders will additionally receive 1 share of each of the five newly listed companies
• The entire exercise is expected to be completed in 12-15 months, Vedanta’s president for finance Ajay Agarwal said

The company’s Board approved six separate listed companies — Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Ltd.

“The de-merger is planned to be a simple vertical split, for every 1 share of Vedanta Ltd, the shareholders will additionally receive 1 share of each of the five newly listed companies,” the statement.

The entire exercise, which would require shareholder and lender approval and a nod from the stock exchanges and courts, is expected to be completed in 12-15 months, its president for finance Ajay Agarwal said.

Separately, Hindustan Zinc Ltd said it could create separate legal entities for its zinc and lead, silver, and recycling businesses to help capitalise on “distinct market positions” and attract investors.

A committee of directors will evaluate the options and advise the Board, along with external advisers.

Last month, chairman Anil Agarwal said demerger and separate listing of some businesses was being considered to unlock shareholder value.

On Friday, the Board of Vedanta Ltd approved the “demerger of business units into independent ‘pure play’ companies to unlock value and attract big-ticket investment into expansion and growth of each” of them.

Vedanta Ltd will continue to hold 65% of Hindustan Zinc Ltd. and the new businesses of stainless steel and semiconductor/display.

Its parent, London-based Vedanta Resources will continue to be the holding company of a diversified mining group. More than 90% of Vedanta Ltd’s profits are from Indian operations.