Vedanta may be getting ready to separate its large operations

28 Sep 2023 , 11:55 AM

News reports claimed that Vedanta Ltd. is close to a deal to spin off operations into a number of listed organizations as part of a comprehensive restructuring that, if successful, may aid tycoon Anil Agarwal in managing the debt load of his metals-to-energy conglomerate.

According to the reports, the corporation has informed its lenders of the reorganization and may make an announcement soon. Businesses such as those in the aluminum, oil and gas, iron ore, and steel industries will be listed individually, news reports added.

The holding firm will continue to be Vedanta Resources, the parent business of Vedanta Ltd. They stated that discussions are still underway and that no decisions have been taken regarding the de-merger’s structure or timetable.

For years, Agarwal’s troubled Vedanta Resources has prioritized resolving a complex corporate structure. However, the stakes have now increased due to a global rise in borrowing costs and the upcoming redemption of approximately $2 billion in bonds.

The group’s March 2025 and August 2024 bonds are currently trading for less than 75 cents on the dollar, which is regarded as distressed. This week, Moody’s Investors Service downgraded the parent’s ratings even further to junk, citing a higher chance of debt restructuring in the coming months.

A more efficient organization may also enable Agarwal to separate out underperforming or slow-growing assets, something the billionaire has long avoided, while allowing investors to back some of the business’s more recent goals, such as those in semiconductors.

Vedanta Ltd.’s market value has decreased by more than a fifth in Mumbai during the past year, to roughly 777 billion Indian rupees ($9.3 billion).

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