Vedanta has said that it will not do any restructuring or demerger activity
New Delhi:
Vedanta has said that it will not undertake any corporate restructuring, including demergers and spin-offs, and will continue with its existing structure.
In November last year, Vedanta’s board had decided that the company should review the corporate structure and evaluate the full range of options and options to unlock value and simplify the corporate structure.
“The Company’s Board of Directors has discussed and taken decisions on various important policy matters. The Company has concluded this comprehensive review with inputs from various experts and advisors.”
The Board of Directors has concluded that the current structure is optimal and in line with the current scale and its diverse businesses. Therefore, the company shall not undertake any corporate restructuring including demerger or spin-off etc. and shall continue with its existing structure,” Vedanta Limited said in a filing to the Bombay Stock Exchange (BSE).
The filing said the company will invest in select acquisitions that are conducive to existing businesses or have synergies with core businesses.
Capital allocation policy will be the primary guiding factor and the company will focus on organic growth, it informed.
The company will consider select mergers and acquisitions within the overall capital allocation framework, Vedanta said, adding that it has proven expertise and successful track record in transforming the acquired businesses.
The filing said the company will participate in a disinvestment program that is a strategic fit with the portfolio.
The bidding for Bharat Petroleum Corporation Limited (BPCL) is in the Expression of Interest (EoI) stage and if the transaction is concluded, the company may manage the acquired business through an appropriate profit-sharing arrangement or management fee model. , An exclusive fund will be set up with a strategic investor to fund potential investments, without taking advantage of the balance sheet of Vedanta Ltd.
The company further said that its dividend policy is both concise and comprehensive at the same time. At least 30 per cent of the attributed profit after tax (before extraordinary items) of the company (excluding profits of Hindustan Zinc Limited (HZL)) will be distributed as dividend, it added.
The dividend from Hindustan Zinc will be passed within six months. Vedanta said this is subject to the board’s evaluation of various factors such as cash flow strength, economic conditions, commodity price cycles, natural calamities etc.
“We will continue to focus on operating performance to drive profitability and free cash flow. We remain committed to the right levels of leverage and a strong balance sheet to maximize shareholder value,” said Anil Agarwal, company’s president.
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