Anil Agarwal-promoted Vedanta Ltd has proposed to reorganise capital and distribute ₹12,587 crore in general reserve as dividend. The chunk of the dividend will go the promoters’ holding company Vedanta Resources as it owns 70 per cent in listed entity Vedanta.

The company will hold shareholders’ meeting on October 11 to seek their approval. The shareholder meet to approve the scheme between Vedanta and its shareholders is being held as per the directions of the Mumbai Bench of the National Company Law Tribunal, according to an exchange filing. The meeting will be chaired by UK Sinha, former Chairman of Securities and Exchange Board of India.

The Anil Agarwal-led Vedanta Limited believes the funds represented by the general reserves are in excess of the company’s anticipated operational and business needs in the foreseeable future. The special dividend of ₹12,500 crore is likely to be ₹33 to 35 per share.

“These excess funds can be utilised to create further shareholders’ value, in such manner and to such extent, as the Board of the Company in its sole discretion, may decide, from time to time and in accordance with the provisions of the Act and other Applicable Law,” said the company.

Debt refinancing

Vedanta has total secured debt of ₹35,267 crore and unsecured debt of ₹15,383 crore as of June-end. Vedanta Resources, the parent of Vedanta Ltd, is facing challenges in refinancing its debt. It has already pledged the entire promoter’s equity of the listed company worth over ₹81,000 crore.

In April, S&P Global Ratings said that dividends from Vedanta, which is 70 per cent-owned by its London-based parent, will likely contribute to a large part of Vedanta Resources’ debt servicing as refinancing over the next six months becomes more challenging.

Amid the debt-pile, Vedanta Group along with Foxconn plans to invest ₹1.54 lakh crore in a semi-conductor plant in Gujarat. Early this week, Anil Agarwal-led company said Vedanta will hold 60 per cent stake in the joint venture company while Foxconn will own 40 per cent. However, on Thursday Vedanta clarified that the proposed business of manufacturing semiconductors is not under Vedanta (listed entity) and it will be undertaken by the ultimate holding company of Vedanta Ltd, Volcan Investments.

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