Bengaluru; November 25, 2024: In a positive step for the demerger of Vedanta Limited, the Mumbai Bench of the National Company Law Tribunal has cleared the way for the meetings of equity shareholders, secured and unsecured creditors to be held within 90 days from the receipt of its order by the company.
“A meeting of the equity shareholders of the Demerged Company be convened and held within 90 days from the date of receipt of the order” said a two-member bench of the NCLT comprising of Technical Member Madhu Sinha and Judicial Member Reeta Kohli in its order of November 21.
That comes after Vedanta Limited had announced a plan in September last year to demerge its business units into independent “pure play” companies to unlock value and attract big ticket investment into the expansion and growth of each of the businesses.
As per the demerger scheme, the existing business of the Vedanta Limited will be demerged, ultimately resulting in six separate listed companies – Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Limited. The de-merger is planned to be a simple vertical split, for every 1 share of Vedanta Limited, the shareholders will additionally receive 1 share of each of the 5 newly listed companies. Vedanta had already received a go ahead/no objection from 75% of its secured creditors as well as the stock exchanges.
According to Vedanta’s stock exchange filings, Vedanta’s demerger will help simplify the company’s corporate structure with sector focused independent businesses. It will provide opportunities to global investors, including sovereign wealth funds, retail investors and strategic investors, with direct investment opportunities in dedicated pure-play companies linked to India’s remarkable growth story through Vedanta’s world class assets.
The demerger will allow the individual units to pursue strategic agendas more freely and better align with customers, investment cycles and end markets. As per Vedanta, the demerger enables to better highlight, and for the market to more easily value, the remarkable technological advances, environmental stewardship and robust growth stories within Vedanta’s family of companies.
The development follows a robust second quarter and first half of the fiscal for Vedanta, where the company delivered quarterly EBITDA at ₹10,364 crores, which rose 44% on a YoY basis. Similarly, Vedanta recorded its highest ever first half EBITDA at ₹20,639 crores, which was up 46% on a YoY basis. Vedanta also said in its recent investor presentation that it has delivered a 5-year total shareholder return of 378%, while its 5-year dividend yield was 67%.
