Vedanta board approves delisting proposal

Our Bureau: Mumbai | Updated on May 19, 2020 Published on May 19, 2020

The board of Vedanta has approved its parent company Vedanta Resources' proposal to delist the company stocks from both BSE and NSE by buying back 49 per cent shares held by public shareholders.

The company had also appointed Upendra C Shukla, Practicing Company Secretary as the scrutiniser to conduct the process of the postal ballot seeking investors approval to take the delisting process forward.

Last Tuesday, billionaire Anil Agarwal-owned Vedanta Resources had expressed its subsidiary by buying out 48.94 per cent shares held by retail investors with an investment of ₹16,000 crore, depending on the final price.

It had fixed the floor price for the buyback of shares at ₹87.50 apiece. However, the final price will be decided after the reverse book building process is completed.

The proposed delisting offer will provide public shareholders of Vedanta an opportunity to realise immediate and certain value for their shares at a time of elevated market volatility.

Vedanta also plans to delist its America Depositary Shares from the New York Stock Exchange and deregister the company from the Securities and Exchange Commission.

Presently, the Public Shareholders hold 169,10,90,351 equity shares of the paid-up equity share capital of the company, excluding ADS issued by the company, it said.

Following the delisting of Vedanta Resources, its subsidiary Hindustan Zinc will be the only listed entity of the group. The government owns 30 per cent in the once public sector entity Hindustan Zinc.

The delisting process is part of the Vedanta Group desire to pursue a process of corporate simplification for several years, including the merger of Sterlite with Sesa Goa to form Sesa-Sterlite (subsequently renamed Vedanta) in 2012, the merger of Cairn India with Vedanta in 2016 and the delisting of Vedanta Resources Plc in 2018.

The Group believes that delisting of Vedanta is the next logical step in this simplification process and will provide the Group with enhanced operational and financial flexibility in a capital intensive business.

The proposed delisting will align the Group's capital and operational structures, streamline the process of servicing the Group's financing obligations and significantly improve a range of important credit metrics.

As a result, the transaction is expected to support an accelerated debt reduction program in the medium term and, in turn, help the Group's highly attractive longer-term growth pipeline.

Published on May 19, 2020

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