Vedanta shares zoom 10% after Anil Agarwal announces delisting plan as virus crisis deepens

Vedanta Resources had a market value of under Rs 33,200 crore going by Tuesday''s closing price of Rs 89.30 on the BSE

FP Staff May 13, 2020 12:55:02 IST
Vedanta shares zoom 10% after Anil Agarwal announces delisting plan as virus crisis deepens

Shares of Vedanta Ltd on Wednesday rose sharply by 10 percent after Anil Agarwal announced plans to delist his Indian flagship firm by buying out nearly 49 percent of public shareholding at Rs 87.5 apiece.

On the BSE, shares of the firm gained 9.96 percent to Rs 98.20, while the scrip zoomed 9.99 percent to Rs 97.95 on the NSE.

Vedanta, whose shares have fallen more than 40 percent this year, houses commodity as well as oil and gas business, PTI said.

The company had a market value of under Rs 33,200 crore going by Tuesday''s closing price of Rs 89.30 on the BSE.

Vedanta shares zoom 10 after Anil Agarwal announces delisting plan as virus crisis deepens

A file photo of Anil Agarwal. Image courtesy: Twitter/@AnilAgarwal_Ved

At the offer price of Rs 87.5, Agarwal's Vedanta Resources will have to shell out Rs 16,218 crore to acquire all of the public shareholding.

In a regulatory filing, Vedanta said it has received a letter dated 12 May, 2020, from Vedanta Resources Ltd (VRL) expressing intention to acquire all fully paid-up equity shares of the company that are held by the public shareholders. c

Announces plans to delist Indian unit

On Tuesday, Vedanta 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, Reuters said.

“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.

 

--With inputs from agencies

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