Eyeing big investments, Vedanta to split into six listed entities

Vedanta shareholders will get one share of each of the 5 new companies [View in browser]( [See all newsletters]( 30 September 2023 Eyeing big investments, Vedanta to split into six listed entities [With listed equity and self-driven management teams, the demerger provides a platform for individual units to pursue strategic agendas more freely] In a bid to simplify the corporate structure, the metal and mining conglomerate [Vedanta]( plans to demerge its businesses into six different entities to unlock value and attract big-ticket investment for driving growth. The board of Vedanta approved the formation of six separate listed companies under Vedanta Aluminium, Oil & Gas, Power, Steel, and Ferrous Materials, Base Metals, and Vedanta Limited. For every share of Vedanta Ltd., investors will receive one share of each of the five new companies. - Also read: [Vedanta to hold a board meeting on Sept 21 to discuss the issuance of NCDs]( In addition, the board of Hindustan Zinc, a subsidiary of Vedanta, also announced plans to review its corporate structure for unlocking potential value and the intention to create separate legal entities for undertaking the Zinc & Lead, Silver, and Recycling businesses of HZL. With listed equity and self-driven management teams, the demerger provides a platform for individual units to pursue strategic agendas more freely and better align with customers, investment cycles, and end markets, said the company. Rapid growth Anil Agarwal, Chairman, Vedanta, said the demand for minerals, metals, oil, gas, and power will grow rapidly, and the newly formed companies are uniquely positioned to meet the rising demand and reduce reliance on imports. Demerging the business units will unlock value and potential for faster growth in each vertical, he said. - Also read: [Vedanta hits over 1-year low after Moody’s downgrades parent]( The new companies will invest $5 billion over the next 10 years in their commitment to achieve net-zero carbon emissions by 2050 and net water positivity by 2030. The company has already secured 1.8 GW of renewable energy through power delivery agreements across group companies. Manish Chowdhury, Head of Research at StoxBox, said the separation of entities would allow for more pure play themes from an investor perspective, allowing them to invest in different cycles at different times. With each entity being run as an independent profit centre, it would eventually result in a more optimal capital structure, benefiting in the long run, he added. Meanwhile, S&P Global Ratings has downgraded Vedanta Resources to CCC from B- on potential bond extensions. The proximity of Vedanta Resources’ large bond maturity in January has increased the likelihood of the company undertaking a liability management exercise, said the rating agency on Friday. - Also read: [Vedanta plans to split each business into separate entities]( Talks with bondholders Vedanta Resources has initiated talks with bondholders to help address the company’s bond maturities of about $3 billion, including $1 billion in January. While the company has partly addressed the maturity of the bond through the sale of about a 4 per cent stake in subsidiary Vedanta in August, the sources for the remaining funding gap, which the analysts estimated to be about $600 million,“ are not yet in place”. Further funds to redeem the bond could depend on events such as the transfer of general reserves to retained earnings at subsidiary Hindustan Zinc or further asset sales, it said. You Might Also Like [Mundra, Kandla and JNPA ports likely to be part of India-Middle East-Europe economic corridor]( [Logistics]( [Mundra, Kandla and JNPA ports likely to be part of India-Middle East-Europe economic corridor]( [Oil prices and strong dollar to keep FPIs on edge]( [Markets]( [Oil prices and strong dollar to keep FPIs on edge]( [‘RBI paid over ₹1300 crore to procure over 720 crore pieces of ₹2000 notes’]( [Economy]( [‘RBI paid over ₹1300 crore to procure over 720 crore pieces of ₹2000 notes’]( [Advent puts in place a new team to helm Suven Pharma]( [Companies]( [Advent puts in place a new team to helm Suven Pharma]( Stay informed Subscribe to our premium news to stay up-to-date on the in deep news in India. [arrow]( Copyright @ 2023, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please try [here]( Manage your newsletter subscription preferences [here]( If you do not wish to receive such emails go [here](