Vedanta expects lender approval for demerger of its businesses by May end

26 Apr 2024 , 12:24 PM

Key lenders are expected to grant approval for Vedanta’s revenue stream-wise demerger by the end of May, as per a senior executive at the conglomerate.

Vedanta, listed in Mumbai, announced its demerger plan in September last year, aiming to establish six separate companies, each housing distinct businesses such as aluminium, power, oil and gas, base metals, and steel.

The demerger process remains on schedule to be completed by the end of the calendar year, as reiterated by the company executive. Approval from lenders comprising 75% by value is necessary for the demerger, with consent secured from multiple private lenders already.

Pending approvals include those from significant lenders like State Bank of India (SBI) and Canara Bank, with ongoing collaboration with these banks to secure approvals by the end of May.

SBI has extended loans of around ₹9,208 Crore to Vedanta, while Canara Bank’s exposure stands at ₹1,730 Crore, including term loans. The absence of concerns or apprehensions from the banks’ end has been noted, with queries primarily revolving around debt allocation post-demerger.

Vedanta’s consolidated net sales witnessed a 6% year-on-year decline, amounting to ₹34,937 Crore, while consolidated net profit dropped by 27% year-on-year to ₹2,273 Crore.

Vedanta Limited, headquartered in Mumbai, is an Indian multinational mining corporation. The company primarily operates in the iron ore, gold, and aluminum mining sectors. Its main mining operations are spread across regions including Goa, Karnataka, Rajasthan, and Odisha.

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