- Vedanta Ltd’s board has decided to demerge business units into independent “pure play” companies each of which will be listed entities with their own board and management. Each entity will pursue a tailored growth strategy and investors will have a menu of options in which to put their funds.
- For every one share in Vedanta Ltd our shareholders will get one share in each of the new five listed entities. The six entities post-demerger will be Vedanta Limited (which will retain its stake in HZL, FACOR, Nicomet, Semiconductors & Display), Vedanta Base Metals (Sterlite Copper, VZI), Vedanta Aluminium, Vedanta Power, Vedanta Oil & Gas and Vedanta Steel & Ferrous Materials.
- Separately, Hindustan Zinc Ltd in a statement said it could create separate legal entities for its zinc and lead, silver, and recycling businesses to help capitalise on “distinct market positions” and attract investors.
- Rationale for Demerger:
a. Simplifies Vedanta’s corporate structure with sector focused independent businesses.
b. Provides 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.
c. With listed equity and self-driven management teams, these demergers provide a platform for individual units to pursue strategic agendas more freely and better align with customers, investment cycles and end markets.
d. 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.
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