Vedanta climbs 2% on demerger timeline update, first dollar-bond issue

Vedanta's demerger of its businesses into six separate entities is likely to be completed by the end of FY25, while its parent raised $900 million in its first dollar bond issue

Vedanta shares gained 2.5 per cent on the BSE on Thursday, September 12. The counter saw buying around two major news items that were regarding the conglomerate's demerger and its parent raising $900 mn via its first dollar bond issue to repay past loans.

At around 12:24 PM, shares of Vedanta were up 1.15 per cent at Rs 430.8 per share on the BSE. In comparison, the BSE Sensex was up 119.96 points at 81,643.12.

On Wednesday, John Slaven, CEO of the aluminium business of Vedanta, said, Vedanta's demerger of mining conglomerate is expected by the end of FY25.

Vedanta has filed an application for its demerger scheme before the National Company Law Tribunal (NCLT). The company has already received approval from 75 per cent of its secured creditors for the proposed demerger of its businesses.

"It's not within our control. It's the NCLT process. They typically take, I don't know, four to six months, to run that process. So by the end of this fiscal year, by the end of this fiscal year (I see it happening)," said Slaven. 

The proposed demerger will create independent companies housing aluminium, oil and gas, power, steel and ferrous materials, and base metals businesses. The existing zinc and new incubated businesses will remain under Vedanta Ltd. READ MORE

In another development, London-listed Vedanta Resources, the parent firm of mining conglomerate Vedanta, on Wednesday raised $900 million in its first dollar-denominated bond issue in more than two years to prepay existing debt.

In a statement, the company said it has raised $900 million at a coupon rate of 10.875 per cent in the five-year US dollar-denominated bond.

"The net proceeds from the offering of the bonds will be used to repay certain of Vedanta's existing bonds (including any accrued interest thereto) and to pay any related transaction costs in connection thereto," it said. READ MORE

In the past one year, the shares of Vedanta have gained 83.73 per cent, compared to the BSE Sensex's rise of 21.2 per cent during the same period.