Vedanta Ltd likely to spin off business into four entities

NATURAL resources conglomerate Vedanta Ltd is planning to spin off its businesses into four entities, media reports said on Thursday (28).

According to the plan, the company, controlled by billionaire tycoon Anil Agarwal, will be demerged into metals, power, aluminium and oil and gas businesses which will be separately listed on the exchanges.

The exercise, which requires shareholder approval and regulatory clearance, may take two to three months to complete.

An announcement on the restructuring is expected this week, Reuters reported citing a source.

The demerger effort comes about three years after Agarwal’s unsuccessful attempt to take the company private.

Last month, he hinted at the conglomerate’s demerger to get better valuations.

Vedanta, which declined to its 52-week low on the Bombay Stock Exchange on Thursday has a market capitalisation of Rs 774.47 billion (£7.63 bn).

On Tuesday (26), Moody's Investors Service downgraded the corporate family rating for Vedanta Ltd’s London-based parent Vedanta Resources, citing a lack of meaningful progress in addressing its upcoming debt maturities through refinancing.

“The company continues to face challenges in refinancing its debt,” Moody’s said.

However, an Economic Times report said Vedanta Resources was holding discussions with private equity firms to raise funds for partial repayment of the company’s bonds maturing in the next two years.

It was in advanced talks with Cerberus Capital, Ares SSG Capital, Bain Capital and Davidson Kempner, seeking a short-term loan of $1 billion, the report said.