Vedanta Announces Spin-Off and Listing of Six Business Units for Growth
Indian conglomerate Vedanta has unveiled plans to demerge and list six of its business units in a bid to boost their growth prospects.
The move is part of Vedanta’s strategy to enhance valuations and comes as its UK-based parent company, Vedanta Resources, faces challenges in raising funds due to rating downgrades and concerns about meeting debt obligations.
The six units set for listing are as follows:
.Vedanta Aluminium
.Vedanta Oil & Gas
.Vedanta Power
.Vedanta Steel and Ferrous Materials
.Vedanta Base Metals
.Vedanta Limited
Chairman Anil Agarwal emphasized that the demerger of these business units is expected to unlock their value and drive faster growth in each respective vertical.
Shareholders of Vedanta will receive one additional share of each of the five listed companies for every share of Vedanta they hold.
The restructuring process is slated for completion by the financial year 2025, contingent upon necessary approvals. Vedanta intends to file for approval from the country’s markets regulator in October 2023.
In a related development, Vedanta’s subsidiary, Hindustan Zinc, has announced plans to establish separate entities for its zinc, lead, silver, and recycling businesses.
This initiative aims to unlock latent value within the organization, and external advisors will be appointed to review its corporate structure.
Earlier this year, Vedanta’s Chairman, Anil Agarwal, sought to reduce the group’s debt by orchestrating a $2.98 billion deal in which Hindustan Zinc would acquire some of the parent company’s zinc assets. However, the Indian government, which holds nearly a 30% stake in Hindustan Zinc, opposed the transaction.
