Vedanta Resources to take Indian unit private as virus crisis deepens; to delist unit from all stock exchanges
Vedanta's delisting is also expected to support an accelerated debt reduction program in the medium-term.
Miner Vedanta Resources Limited on Tuesday confirmed that it would take its Indian unit Vedanta Ltd private, as it looks to accelerate simplification of its corporate structure amid the coronavirus crisis.
The company said it will delist the unit from all stock exchanges and was willing to accept shares tendered in the offer at Rs 87.5 ($1.16) per equity share, a premium of 9.9 percent on Monday’s closing stock price, but a discount of 1.7 percent over Tuesday’s closing.
“Due to the impact of COVID-19 pandemic, we have accelerated the strategy in this challenging environment to ensure support for meaningful deleveraging and to enable us to continue to invest in the growth of the business,” Vedanta Group Chairman Anil Agarwal said.
Bloomberg had earlier reported here that billionaire Agarwal was exploring a potential deal to take Vedanta Ltd private.
The Indian unit’s delisting will provide Vedanta Resources, which owns a 36.8 percent stake in the unit, with enhanced operational and financial flexibility, as well as “transform” its credit profile, Vedanta Resources said.
The delisting is also expected to support an accelerated debt reduction program in the medium-term.
In 2018, Vedanta Resources delisted here itself from the stock exchange in London, where it had faced protests and legal action, and said buying out the London listing would simplify its structure and that the Indian market was deep enough to raise capital.
Hindustan Zinc will continue to be listed in India, said Vedanta Resources, which owns a 64.9% stake in the company.
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In January, the group had offered Rs 15,493 crore for buying 29.5 percent in HZL, and Rs 1,782 crore for 49 percent residual holding in Balco.
Hindustan Zinc has already constructed 9,000 toilets out of its planned 30,000 in Rajasthan villages in collaboration with the state government.
The government currently holds 29.5 percent stake in HZL and 49 percent in Balco.