Vedanta promoters raise ₹6,000 cr by pledging shares

Suresh P Iyengar Mumbai | Updated on November 25, 2021

Holding companies raise funds from Madison Pacific Trust, StanChart

The holding companies of Vedanta have raised $800 million (about ₹6,000 crore) by pledging shares of the company with Madison Pacific Trust and Standard Chartered Bank.

Accordingly, one of the promoters group company Twin Star Holdings, as a borrower, has entered into an agreement with Standard Chartered Bank and Madison Pacific Trust to raise $400 million (about ₹3,000 crore), the company said in a statement on Thursday.

Vedanta Resources and Welter Trading had stood guarantor to the borrowing.

Similarly, Vedanta Netherland Investments BV has borrowed $150 million (₹1,125 crore) from the same lenders with the guarantee extended by Vedanta Resources and Vedanta UK Investments.

In a separate agreement, Vedanta Resources had raised $250 million (₹1,875 crore) from Standard Chartered Bank Hong Kong and Madison Pacific Trust.

Restrictions on group firms

Following this fundraise, the promoters companies are not allowed to raise funds by pledging shares unless certain conditions are fulfilled by Vedanta Resources and its subsidiaries as they have to retain 50 per cent directly or indirectly to retain control over the company. There are also restrictions on promoters group companies in disposing off their holdings, the company said.

Madison Pacific Trust, in a separate statement, said Vedanta Netherland Investment BV and Twinstar Holdings have acquired 1.71 per cent and 2.80 per cent of the equity share capital of Vedanta.

The equity shares acquired by both the companies are likely to be considered as encumbered, it said.

The promoters of Anil Agarwal-led Vedanta are gearing up to acquire substantial stake in its group company Hindustan Zinc as the government plans to soon offload 30 per cent in the open market.

Meanwhile, the company intends to separate its aluminium, steel, and oil and gas businesses, and list them on the exchange.

On a consolidated basis, Vedanta reported that its net profit was up multi-fold to ₹4,615 crore in the September quarter, against ₹824 crore logged in the same period last year due to a sharp jump in metal prices. Net sales rose 44 per cent to ₹30,048 crore in September.

The company has an interest in oil and gas, zinc, lead, silver, copper, iron ore, steel, and aluminium and power across India, South Africa and Namibia.

Published on November 25, 2021

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