Taking Vedanta Ltd private will give Agarwal-controlled parent firm access of company cash:Moody's

Billionaire Anil Agarwal-controlled Vedanta Resources Ltd's proposal to take its India-listed subsidiary Vedanta Ltd private will give it access to cash surpluses in the oil and gas business unit, Moody's Investors Service said Tuesday.

Vedanta Resources Ltd (VRL), which owns 50.1 per cent of Vedanta Ltd, has offered to acquire all of the balance 49.9 per cent shareholding held by the public and delist the company from the BSE.

On May 18, Agarwal-chaired board of directors of Vedanta Ltd approved its parent, VRL's open offer.

Moody's in an issuer comment said the move will simplify group structure and is credit positive.

"The proposal will now be put to a shareholder vote and needs to be approved by at least 66.7 per cent of minority shareholders," it said. "The acquisition of the minority stake will be at a price that is the higher of either the floor price, Rs 87.5 per share a 10 per cent premium over the closing market price of Rs 79.6 on May 11 or the price discovered through the reverse book building process."