‘The market is good, production is going well; Having a separate firm will create value.
Metals and mining conglomerate Vedanta Ltd. will announce the outline of a proposal to convert key businesses into separate listed companies by the end of March, Chairman Anil Agarwal said.
While the zinc business is already housed in a listed subsidiary, the plan is to separate the aluminum, iron and steel, and oil and gas businesses into standalone, listed entities.
He added that this will ‘unlock value for all stakeholders’ as well as create businesses that are better positioned to capitalize on their specific market position and deliver long-term growth and enable strategic partnerships. PTI in an interview. It will also help in formulating capital structure and capital allocation policies based on business-specific dynamics, as well as creating distinct investment profiles to attract a deeper and wider investor base.
‘Natural Progress’
“It (demerger) is a natural thing. The market is very good and production (in various divisions of Vedanta) is going well. And so we think having separate companies will create valuations,” he said. “Maybe in a month and a half, sometime before the end of March we will announce the full (contour).”
Vedanta Ltd. announced in November that its board of directors had formed a sub-committee to evaluate potential spin-offs of its aluminum, iron and steel, and oil and gas businesses into separately listed entities. After the sub-committee’s evaluation, the board may also consider other options such as strategic partnership.
The spin-off will result in three newly listed entities with shareholding of Vedanta Ltd. Subsequently, the London-based parent Vedanta Resources group will consist of five listed entities – Vedanta Ltd., the three newly listed firms and the listed zinc subsidiary, Hindustan Zinc comprising Vedanta Ltd. has 64.9% stake.
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