Anil Agarwal is taking Vedanta Ltd private. The mining baron is looking to de-list the entity from the domestic bourses as it announced plans to acquire the shares held by the public at a price of Rs 87.5 per share.
Compared with the closing price of the Vedanta scrip on the BSE on Monday, the indicative offer price represents a premium of almost 10 per cent.
While the announcement came after market hours, shares of Vedanta surged on Tuesday almost 12 per cent to close at Rs 89.30 as the markets may have got a whiff of the promoters’ move.
The diversified Vedanta has interests ranging from oil & gas exploration to power generation, aluminium and steel.
In a regulatory filing to the stock exchanges, Vedanta said that it has received a letter from one of the members of the promoter group —Vedanta Resources Ltd (VRL) — and that in that letter, VRL has expressed its intention to, either individually or along with one or more subsidiaries, acquire all equity shares of the company that are held by the public shareholders.
It disclosed that VRL along with the other members of the promoter group hold 1,76,43,26,080 equity shares aggregating to 51.06 per cent of the paid-up equity share capital of the company, excluding American Depository Shares (ADS) issued by the company.
The public shareholders hold 169,10,90,351 equity shares totalling 48.94 per cent of the equity share capital of the company, excluding ADS issued by the company.
According to Vedanta, it has issued 6,54,45,052 ADS against 26,17,80,208 underlying equity shares. Other than 2,48,23,177 ADS representing 9,92,92,708 equity shares which are held by one of the members of the promoter group, the rest of the ADS are held by public shareholders should they choose to convert the ADS into equity shares.
Thus if all the outstanding ADS are to be converted into equity shares, the shareholding of the promoter group will be 186,36,18,788 shares representing 50.14 per cent, while the holding of the public shareholders will be 185,35,77,851 shares aggregating to 49.86 per cent of its equity.
The rationale
Explaining the rationale for the delisting proposal, the group said that it has been pursuing a process of corporate simplification for several years that includes the merger of Sterlite with Sesa Goa to form Sesa-Sterlite (subsequently renamed Vedanta Ltd) in 2012, the merger of Cairn India with Vedanta Ltd in 2016, and the delisting of Vedanta Resources Plc (subsequently renamed Vedanta Resources Ltd) in 2018.
“The group believes that a delisting of Vedanta Ltd is the next logical step in this simplification process and will provide the group with enhanced operational and financial flexibility in a capital intensive business,’’ it said.
According to the group, the move will enable it to maintain its strategic priority of attaining leadership in diversified natural resources, while maintaining a flexible capital structure. Further, the proposed delisting offer is also expected to provide public shareholders of Vedanta Ltd an opportunity to realise immediate value for their shares at a time of elevated market volatility.
