Vedanta Forms Subsidiary Vedanta Base Metals for Demerger Implementation

11 Oct 2023 , 01:53 PM

Vedanta Ltd has incorporated a wholly-owned subsidiary, Vedanta Base Metals Ltd, to implement the demerger scheme. The new subsidiary, Vedanta Base Metals Ltd, has been established to conduct the metal business.

The incorporation was completed on October 9, 2023, in accordance with SEBI Listing Regulations. Vedanta recently approved a restructuring plan resulting in six separate listed firms, including Vedanta Base Metals. The restructuring is expected to be completed within 12-15 months.

Vedanta Resources, the parent company, has faced rating downgrades and debt concerns, making it challenging to raise funds. The demerger is intended to unlock value and accelerate growth in each business vertical.

Vedanta Resources plans to honor all pending payments due in 2024 and has secured financing for future obligations. The demerger plan includes Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, and Vedanta Base Metals, in addition to Vedanta Ltd. Vedanta’s effort to reduce debt by having Hindustan Zinc acquire some zinc assets was opposed by the Central government, which owns a significant stake in Hindustan Zinc.

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