NEW DELHI, Jan 17: Mining giant Vedanta Ltd announced on Friday that its shareholders and creditors are set to convene next month to discuss the proposed demerger of the company.
Approval of the demerger proposal would enable the different business segments of the company to function as independent entities.
The mining firm, listed on the Bombay Stock Exchange, revised its demerger plan last month, opting to keep its base metal operations within the parent company.
The upcoming meeting for equity shareholders, secured creditors, and unsecured creditors of Vedanta Ltd is scheduled for Tuesday, February 18, focusing on the proposed arrangement involving Vedanta Ltd, Vedanta Aluminium Metal Ltd, Talwandi Sabo Power Ltd, Malco Energy Ltd, Vedanta Base Metals Ltd, and Vedanta Iron and Steel Ltd, as per the company’s regulatory filing.
This meeting is scheduled in compliance with the National Company Law Tribunal (NCLT) Mumbai bench order dated November 21, 2024.
Previously, the company indicated that after the demerger, its operations would be structured into six independent companies: Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Ltd.
However, the plan was later modified.
Vedanta mentioned that this decision came after discussions with stakeholders, including lenders, and approval from its board of directors.
The company also emphasized its ongoing efforts to find new ways to resume its copper operations in Thoothukudi, Tamil Nadu, a crucial part of its base metals segment, as a reason for the recent changes.
The decision not to finalize the demerger of the base metals segment and its retention within Vedanta is not expected to affect overall shareholder value, the firm stated.
“A demerger of the Vedanta Base Metals segment may be considered at a future date when the Base Metals business is more developed and able to realize its full value potential for shareholders,” the filing noted.
Vedanta Chairman Anil Agarwal previously indicated that the proposed demerger of the company’s diverse sectors, which encompass over 15 commodities, will mark a transition from asset managers to asset owners.
During this transitional phase, Vedanta is concentrating on consolidating and enhancing its asset base to position itself as a leader in each sector, according to the chairman’s statements.
Following lender approval, the diversified natural resources firm approached the NCLT in pursuit of a demerger, expressing hopes to complete the process by the end of the current fiscal year.
The demerger aims to simplify the corporate structure by establishing independent operations. Additionally, it would provide global investors with direct investment options in specialized companies associated with India’s robust growth.
This strategic separation will enable individual units to pursue their objectives more freely and align more closely with customer needs, investment cycles, and end markets.
From FY24 onwards, the company has committed to investing USD 1.9 billion in growth capital expenditures across its operations.
For the September quarter, the company reported a consolidated net profit of Rs 4,352 crore, compared to a consolidated net loss of Rs 1,783 crore during the same period last year. (PTI)
