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Vedanta Ltd.’s board has approved the demerger of the business into six listed companies in an effort to unlock “significant value”, as per an exchange filing. The companies are Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, Vedanta Limited. The demerger is planned to be a simple vertical split wherein, for every 1 share of Vedanta Ltd, the shareholders will additionally receive 1 share of each of the 5 newly listed companies. The split-up is expected to be completed in the financial year ending March 2025. The proposal is aimed at unlocking shareholder value and attracting big ticket investments. The move, if successful, would allow the parent company Vedanta Resources access to additional capital and enable it to monetize some low growth assets to meet its upcoming debt obligations. As reported last week, the company is also said to be in talks for restructuring its upcoming $3bn of debt obligations due over the next 2 years.
Vedanta’s dollar bonds were trading weaker with its 6.125% 2024s bond down 0.23 cents on the dollar to 63cents.
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