Vedanta Ltd in India (VDAN.NS) is approaching the final stages of a deal to separate its various businesses into multiple publicly traded entities as part of a more extensive corporate restructuring initiative, according to individuals with knowledge of the situation, as reported by Bloomberg News on Wednesday.
The company has already communicated its intention to restructure to its lenders, and an official announcement regarding these plans is anticipated in the upcoming days. This restructuring will involve the individual listing of sectors such as aluminum, oil and gas, and iron and steel as distinct entities.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/F4X2OQO6N5PE3KLMNMOI2YYFMY.jpg)
According to Bloomberg's report, the decision to undergo demerger could potentially assist Vedanta Resources, the parent company of Vedanta, in effectively handling its debt burden. It's worth noting that Vedanta Resources will continue to serve as the holding company for the newly established units.
When approached for a comment by Reuters outside of regular business hours, Vedanta did not provide an immediate response.
In the previous month, Vedanta's Chairman, Anil Agarwal, announced that the company was contemplating the possibility of individually listing certain or all of its diverse businesses, encompassing areas ranging from metals and mining to oil and gas.
The current plans represent a departure from Anil Agarwal's efforts in 2020 to delist Vedanta Ltd, a move aimed at streamlining the company's corporate structure but ultimately unsuccessful.
Vedanta Resources has been facing challenges in raising capital, primarily due to credit rating downgrades and concerns about meeting its debt obligations.
Earlier this year, Anil Agarwal attempted to reduce the group's substantial $7.7 billion debt by arranging for Hindustan Zinc Ltd (HZNC.NS), a subsidiary of Vedanta Ltd, to acquire certain zinc assets from the parent company in a deal valued at $2.98 billion. However, the Indian government, which holds a nearly 30% stake in Hindustan Zinc, objected to this proposal.
.jpg)