Vedanta's rejig to be confined to India ops

The impending restructuring of Vedanta Group will be confined only to its operations in India and won't include the African business, whose valuation was reportedly the main reason for a similar attempt in 2008 that failed.

"Anil Agarwal is unlikely to bring his African business in the restructuring purview this time. The exercise will largely be confined to the company's operations in India," a source in the know said.

The London-based mining group is looking at simplifying its corporate structure in the planned rejig and may bring Sesa Goa in the fold of its flagship Sterlite Industries.

Vedanta Resources bought majority stake Konkola Copper mine in Zambia in 2004, but its attempt to bring the company under the fold of the Indian operations was in vain following strong protest from shareholders alleaging over-valuation of the assets meant to benefit the promoters.

The source said that the London-listed metals and mining major might refrain from bringing the African asset in its fold anticipating same kind of protests.

"Instead, it is going to make Sterlite Industries its holding company in India which will have two one arms. One is for its iron ore assets and the second one for non-ferrous metal assets," he said.

However, in a filing to Bombay Stock Exchange, Sterlite Industries today said its strategy is to simplify and consolidate the corporate structure.

"Management reviews options to deliver this strategy on an ongoing basic and will update the market as appropriate. The Company reviews its strategic options on an ongoing basis and once any such option is approved by the Company, the Company will submit a detailed comment," it said.

The need for restructuring may have arisen because of the huge debt the group had to raise to fund the $8.6 billion acquisition of Cairn India, sources said.

Sources said the Group, which has a gross debt of $9.75 billion, needs to streamline cash inflows from its subsidiaries to retire debt.

It had bought 58.5% stake, along with its subsidiary Sesa Goa, in Cairn India last year for $8.67 billion. Sesa Goa holds 20% in Cairn India.

Sterlite Industries India is the principal subsidiary of Vedanta Resources with operations in India and Australia.