Vedanta Ltd preparing to demerge sprawling operations

By Anto Antony, Baiju Kalesh and Dinesh Nair

Vedanta Ltd. is nearing a deal to spin off its businesses into several listed entities in a broader restructuring that will help commodities tycoon Anil Agarwal unlock shareholder value, people familiar with the matter said.

The company, whose operations span everything from metals to energy, has informed its lenders of the restructuring and could announce the plans in the coming days, according to the people. Businesses including aluminum, oil and gas, iron and steel will be listed as separate, pure-play entities as part of the move, they said.

Shares in Vedanta Ltd. have fallen by more than a fifth in Mumbai over the past 12 months, giving the company a market value of about 777 billion Indian rupees ($9.3 billion).

The move to de-merge could also help Vedanta Ltd.’s parent, Vedanta Resources, manage its debt load, the people said, asking not to be identified discussing confidential information.

Vedanta Resources will remain the holding company for the new units, according to the people. Deliberations are ongoing and no final decisions on the structure or timing of the de-merger have been made, they said.

Representatives for Vedanta Ltd. and Vedanta Resources didn’t immediately respond to requests for comment.