MUMBAI: Anil Agarwal-controlled Vedanta has secured approval from creditors holding 83% of its debt value for its planned demerger, surpassing the minimum requirement of 75% support.
This significant milestone paves the way for Agarwal to divide the mining conglomerate into at least five different businesses and address the debt situation.
The restructuring will enable separate listings of the divided businesses – aluminum, oil & gas, power, steel and semiconductors – potentially enhancing the overall worth of the Vedanta group.
The demerger is expected to draw investors particularly interested in some of the company’s newer but riskier businesses such as semiconductors. Vedanta’s parent Vedanta Resources will continue as the holding entity. For each Vedanta share owned, investors will receive one share in each new entity.
The demerger scheme, which received board approval in Sept 2023, has obtained No Objection Certificates from BSE and NSE. Initially, Vedanta had proposed a six-way division but later modified it to create five separate entities. Despite obtaining lender approvals previously, Agarwal’s earlier attempts to streamline Vedanta’s complex financial structure were unsuccessful.
The London-based parent has reduced its debt by over $4 billion during the past two years and plans to clear an additional $3 billion over the next three years. On Tuesday, Vedanta’s shares closed at Rs 417 on BSE, rising 0.3%.