Vedanta Resources appoints Georgeson for shareholder engagement on delisting issue

PALAK SHAH Mumbai | Updated on June 02, 2020 Published on June 02, 2020

VRL has offered ₹87.5 per share as its delisting offer price, which experts say is far too low

UK’s Vedanta Resources (VRL) has appointed US-based shareholder engagement firm Georgeson to convince shareholders to accept its delisting process for India’s Vedanta Ltd (VDL). VRL holds 50 per cent stake in VDL and it requires 40 per cent more to delist the company from Indian stock exchanges.

VRL has offered ₹87.5 per share as its delisting offer price, which experts in India have said is far too low. The share price of VDL closed at ₹96.85 on the BSE on Tuesday.

India’s largest state-owned investor Life Insurance Corporation (LIC) holds 6.37 per cent stake in VDL and it is likely to seek a higher price for allowing the delisting of shares, sources involved with the deal told BusinessLine.

Georgeson is reaching out to various stakeholders and even domestic proxy advisory firms in India to convince them of the offer, sources said. ICICI Prudential Equity Arbitrage Fund, HDFC Trustee Company, and SBI Arbitrage Fund hold 5.3 per cent, 2.47 per cent and 1.12 per cent respectively, in the company.

For VRL’s offer to succeed, it needs approval from these large shareholders. But domestic experts have warned that the value of the stake that VDL holds in some of its subsidiaries could be at a substantial premium than the delisting price VRL has offered.

Foreign portfolio investors (FPIs) hold around 15 per cent stake in the company, but the holding is highly scattered. Georgeson has also reached out to FPIs, sources said.

‘Procedural aspects’

When contacted, VDL spokesperson said, “Vedanta Resources has appointed Georgeson to assist with certain procedural aspects of the delisting proposal by VRL for Vedanta Ltd.”

Published on June 02, 2020
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