Vedanta creditors likely to meet in February to approve business split

Vedanta plans to divide its business into units focused on aluminum, oil & gas, power, steel and finally semiconductors, which will be left in the original business with electronics and copper assets

By Baiju Kalesh, Saikat Das and Preeti Singh

  Vedanta Ltd. creditors will gather next month to give their final verdict on a plan to split the sprawling Indian mining conglomerate into at least five different businesses, a key step in a months-long effort to simplify the group’s structure and help manage its debt burden.  

Lenders have been asked to a court-ordered meeting on Feb. 18 to discuss details of the plan, the people said, asking not to be identified as the matter is private. If approved, the proposal will then be taken to shareholders for their green light.

 

Vedanta, which has sought to reorganize its complex structure in the past, announced its latest restructuring plans in late 2023. Those considered splitting out aluminum, oil and gas, power and steel, which could all be separately listed as part of an effort to improve the valuation of the overall group and to reduce a multi-billion dollar debt load at its parent company Vedanta Resources. 

 

That plan was approved by 75 per cent of the firm’s secured lenders last year. 

 

Now, however, Vedanta plans to divide its business into units focused on aluminum, oil & gas, power, steel and finally semiconductors, which will be left in the original business along with the company’s electronics and copper assets, the people said. To proceed, the final plan again needs a thumbs up from 75 per cent of creditors when they meet in February.

 

Deliberations are ongoing and details such as the timing of the meeting and deal structure may still change, the people said. A representative for Vedanta declined to comment.

 

Vedanta shares have gained more than 50 per cent in the past 12 months, giving the company a market value of roughly $19 billion.