Vedanta Resources to take Indian unit private as virus crisis deepens

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Miner Vedanta Resources Limited on Tuesday confirmed that it would take its Indian unit Vedanta Ltd private, as it looks to accelerate simplification of its corporate structure amid the coronavirus crisis.

The company said it will delist the unit from all stock exchanges and was willing to accept shares tendered in the offer at 87.5 Indian rupees ($1.16) per equity share, a premium of 9.9% on Monday’s closing stock price, but a discount of 1.7% over Tuesday’s closing.

“Due to the impact of Covid 19 pandemic, we have accelerated the strategy in this challenging environment to ensure support for meaningful deleveraging and to enable us to continue to invest in the growth of the business,” Vedanta Group Chairman Anil Agarwal said.

Bloomberg had earlier reported https://www.bloomberg.com/news/articles/2020-05-12/billionaire-agarwal-is-said-to-explore-buyout-of-india-s-vedanta that billionaire Agarwal was exploring a potential deal to take Vedanta Ltd private.

The Indian unit’s delisting will provide Vedanta Resources, which owns a 36.8% stake in the unit, with enhanced operational and financial flexibility, as well as “transform” its credit profile, Vedanta Resources said.

The delisting is also expected to support an accelerated debt reduction program in the medium term.

In 2018, Vedanta Resources delisted https://www.reuters.com/article/us-vedanta-agm/vedanta-shareholders-back-london-delisting-amid-protest-idUSKCN1MB3MA itself from the stock exchange in London, where it had faced protests and legal action, and said buying out the London listing would simplify its structure and that the Indian market was deep enough to raise capital.

Hindustan Zinc will continue to be listed in India, said Vedanta Resources, which owns a 64.9% stake in the company.

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