Vedanta Revises Demerger Plan, To Retain Base Metal Biz Under Rarent Firm

New Delhi: Mumbai-listed mining conglomerate Vedanta Ltd said on Friday that it revised its demerger proposal and decided to retain the base metals undertaking within the parent firm. In a regulatory filing, Vedanta stated that the decision came following the deliberations with stakeholders, including lenders, concerning the scheme and approval by the board of directors in a meeting held on Friday. The company had earlier said that existing businesses would be structured into six independent companies after the demerger - Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Ltd.

"Lenders believe the Scheme would be more favourable for unlocking value and overall optimal balancing of debt allocation across residual Vedanta and resulting companies if the Vedanta Base Metals undertaking is retained in residual Vedanta itself," the company said in the latest filing. Vedanta also stressed the ongoing search for alternative avenues for restarting the copper business in Thoothukudi, Tamil Nadu, an integral part of the Base Metals undertaking, to become the reason behind the development. The non-implementation of the demerger of the Base Metals undertaking and retaining the same in Vedanta will not impact the overall value creation for shareholders. 

ALSO READ: Infomerics Valuation Pays Rs 57.6 Lakh To Settle CRA Rule Violation Case With SEBI

Demerger Update: Vedanta revises its demerger plan, retaining the base metals business within the parent company after stakeholder deliberations.

"A demerger of the Vedanta Base Metals undertaking may be considered at a stage when the Base Metals business evolves and matures to realise the full value potential of such demerger for shareholders," according to the filing.

Vedanta Secures Creditor Approval for Business Demerger to Enhance Growth and Strategic Focus

The shareholders will continue to benefit from value unlocking in the Base Metals business as part of residual Vedanta while also receiving equivalent shares in the resulting companies. Shareholders' beneficial interests in the overall value of Vedanta and resulting companies will remain unaffected, per the filing. The revision will not impact the parts of the demerger scheme. All terms, including the share entitlement ratio, remain unchanged. Vedanta Chairman Anil Agarwal had earlier said the proposed demerger of the company's diverse verticals representing more than 15 commodities will see it progress from being asset managers to asset owners. As the company passes through the transition phase, Vedanta is focusing on consolidating and strengthening its asset base to emerge as a world leader in each of its verticals, according to the chairman. The diversified natural resources company had moved the NCLT seeking a demerger after receiving a nod from lenders, expressing hopes of completing the process by the end of this fiscal year.

ALSO READ: Funds Devolved To States Under 15th Finance Commission Higher: Finance Minister

Vedanta had received approval from 75 per cent of secured creditors for the proposed demerger of its businesses. The demerger will help simplify the company's corporate structure by creating independent businesses. Moreover, it will offer global investors direct investment opportunities in pure-play companies linked to the country's impressive growth. The demerger will allow the individual units to pursue strategic agendas more freely and better align with customers, investment cycles, and end markets. From FY24 onwards, the company has been investing USD 1.9 billion as growth capex across its businesses. The company reported a consolidated net profit of Rs 4,352 crore in the September quarter. It had posted a consolidated net loss of Rs 1,783 crore in the year-ago period.