Anil Agarwal-led Vedanta Ltd has called off its corporate restructuring plan that was designed to demerge its aluminium, iron & steel, and oil & gas businesses and list them on the bourses.
Last November, Vedanta had announced that the board of directors had decided to undertake a comprehensive review of the corporate structure and evaluate a full range of options and alternatives including demerger, spinoffs, and strategic partnerships to unlock value.
It then constituted a committee of directors to evaluate and recommend options and alternatives.
After a comprehensive review based on inputs from various experts and advisors, the company decided it would “not undertake any corporate restructure including demerger/spin off etc. and will continue with its existing structure,” Vedanta said in a regulatory filing to stock exchanges after market hours.
Before the announcement, the Vedanta scrip had closed with gains of 1.22 per cent at Rs 369.60 on the BSE.
In a press statement, the firm said it would continue to focus on capital allocation, capital expenditure and also look at inorganic growth via acquisitions.
It disclosed that the capital allocation policy will be the primary guiding factor and the focus will be on organic growth. The company said it would consider select mergers and acquisitions, within the overall capital allocation framework.
“Vedanta has proven expertise and successful track record of turning around acquired businesses. Company will participate in divestment program which has strategic fit with the portfolio. The bid for BPCL is at EOI (expression of interest) stage. In case the transaction culminates, company may undertake management of the acquired business, through appropriate profit-sharing arrangement or on management fee model,” Vedanta added.
The company also said it would establish a specific fund with a strategic investor to raise money without leveraging its balance sheet.
Vedanta said a minimum 30 per cent of attributable profit after tax (before exceptional items) of the company would be distributed as dividends.
