 "Anil Agarwal")
Anil Agarwal-promoted Vedanta Resources and India-listed entity Vedanta over the past few months have appointed chiefs for each of their main businesses, a potential harbinger for separating them into different entities.
Quoting people familiar with the matter, news agency Bloomberg on Thursday said Vedanta was preparing to spin off businesses into listed entities as part of a broad restructuring, which, if successful, could help Agarwal to manage his metals-to-energy empire’s debt.
Last month, Agarwal, in a message to shareholders, indicated plans to explore creating independent entities for some or all of Vedanta’s businesses. The company has a presence in zinc, aluminium, iron ore, power, copper, and oil and gas.
Even before Agarwal’s note, both the promoter and Indian listed company were busy appointing chief executive officers (CEOs) for businesses such as aluminium, base metals, oil and gas, and semiconductors.
Since January, Vedanta witnessed three CEO appointments -- Nick Walker as CEO for the oil and gas business, David Reed to head the semiconductor business, and John Slaven to be CEO of the aluminium business, effective next week.
In September, Vedanta Resources announced appointing Chris Griffith as CEO for its base metals business and president of its international businesses, including the zinc business in South Africa and Namibia, its iron ore business in Liberia, and the copper portfolio including operations in Zambia, the UAE, and India. The appointment is effective next week. Agarwal has also proposed selling the Zambia copper assets to Vedanta at a fair valuation.
An email query to Vedanta requesting a comment on the rationale for these new appointments remained unanswered.
The Bloomberg report further said the company had informed its lenders of the intended restructuring and could announce the plans in the coming days.
Earlier this week, Moody’s Investors Service downgraded the corporate family rating for Vedanta Resources in the absence of any meaningful progress on refinancing its upcoming debt maturities, in particular the $1 billion bonds maturing in January and August.
Vedanta in its note to the BSE in August had referred to Agarwal’s idea of separating businesses into independent entities as an exercise of unlocking stakeholder value.
“Theoretically, the group has enough assets to divest and meet debt obligations. The intent remains to be seen. Further, there are other technicalities of the pledged shares in both of the India listed entities,” said an industry expert.
