Vedanta to split business into 3 listed entities

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SME Times News Bureau | 17 Nov, 2021
Billionaire Anil Agarwal's Vedanta Ltd proposes major restructuring of its corporate structure that may include demerger and listing of the aluminium, iron and steel, and oil and gas businesses as standalone entities.

Under the proposed scheme of demerger, the company's flagship Vedanta Ltd would operate parallelly with the three proposed listed businesses.

The board of directors of Vedanta has decided on the restructuring considering the scale, nature and potential opportunities for various business verticals of the company. The changes would follow a comprehensive review of the company's corporate structure.

The restructuring would evaluate a full range of options and alternatives, including demergers, spin-offs, strategic partnerships for unlocking value and simplification of corporate structure, the company said in a statement.

Vedanta has also constituted a committee of directors to evaluate and recommend such options and alternatives to the board of directors.

"The strategic objectives outlined by the board of directors for undertaking such an exercise are simplification and streamlining of corporate structure; unlocking value for all stakeholders; creation of businesses which are positioned better to capitalise on their distinct market positions; and deliver long-term growth and enable strategic partnerships," the statement said.

The objective of restructuring is also to evolve a tailored capital structure and capital allocation policies based on business specific dynamics; distinct investment profiles to attract deeper and broader investor bases; and accelerate emissions reduction and strong ESG practices.

The board has also appointed various advisors to assist it in evaluating the options.

It is anticipated that the board and the advisors will complete their evaluation and consider the way forward as soon as possible.

Appropriate announcements and public disclosures in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations and other applicable laws will be made as and when required, the company said.

"Over the past few years, the group has materially improved the operational performance of its businesses, increased cash flows, reduced debt while concomitantly focusing on accelerating investments in energy transition, health and safety, diversity and ESG in general," Agarwal said.

"This step, which we announced today, while pending a detailed evaluation, is designed to create independent, industry-leading, global public companies, where each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees. We will continue to leverage our significant strengths in technology, operations and people to better serve our customers and all stakeholders," he added.

Vedanta Limited, a subsidiary of Vedanta Resources Limited, is one of the world's leading oil & gas and metals company with significant operations in oil & gas, zinc, lead, silver, copper, iron ore, steel, and aluminium & power across India, South Africa and Namibia.