Anil Agarwal-led Vedanta said on Tuesday the company would voluntarily delist from the BSE and the National Stock Exchange of India. Either individually or along with one or more subsidiaries, the promoter company Vedanta Resources would acquire all fully paid-up equity shares that are held by public shareholders, the company said in an exchange notification.
“The idea is to further simplify the corporate structure so that we can service our debt better. With aluminium and oil prices remaining gloomy for too long and no one putting money in it, we (promoters) decided that it is best to delist,” Anil Agarwal, chairman of Vedanta Resources, told Business Standard.
Vedanta Resources will offer Rs 87.5 a share to 49.86 per cent public shareholders. This offer price is fixed at a 9.9 per cent premium to Monday’s closing price of Rs 79. At this price, VRL will put in Rs 16,219 crore including buy-out of American depository shares. As on March 31, the promoter holding in Vedanta stood at 50.14 per cent, while public shareholders was at 49.86 per cent.
“No one is putting money in the market at this juncture, but we will be shelling out nearly Rs 18,000 crore for the buyout,” said Agarwal.
Vedanta closed at Rs 89.30 a share on Tuesday, up 12 per cent from the previous close on BSE. After delisting, the company’s America Depository Shares from the New York Stock Exchange would also be delisted along with deregistering the entity from the Securities and Exchange Commission.
“Vedanta Resources currently carries a net debt of $10 billion, which will go to $12 billion post buyout. We plan to service debt via earnings of Vedanta, which should be about $3 billion per annum,” explained Agarwal.
But, Hindustan Zinc, a wholly-owned subsidiary of Vedanta, will continue to remain listed on the Indian bourses. “The group believes that a delisting is the next logical step in this simplification process and will provide the group with enhanced operational and financial flexibility in a capital intensive business,” the company said in its filing.