Vedanta shareholders, creditors to decide on demerger plan on February 18

New Delhi: Mining conglomerate Vedanta Ltd on Friday said that its shareholders and creditors will meet next month to decide on the proposed demerger of the company.

The approval of the demerger proposal will pave the way for the company's various business verticals to become separate entities.

The Bombay Stock Exchange-listed mining firm had last month revised its demerger plan and decided to retain its base metal undertaking within the parent firm.

The meeting of equity shareholders, secured creditors and unsecured creditors of Vedanta Ltd is "scheduled to be held on Tuesday, February 18... in the matter of proposed scheme of arrangement between Vedanta Ltd and Vedanta Aluminium Metal Ltd and Talwandi Sabo Power Ltd and Malco Energy Ltd and Vedanta Base Metals Ltd and Vedanta Iron and Steel Ltd", the company said in a regulatory filing.

The meeting has been scheduled pursuant to the order dated November 21, 2024 of the National Company Law Tribunal (NCLT), Mumbai bench, it said.

The company had earlier said post-demerger its existing businesses will be structured in six independent companies -- Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta Ltd.

However, later it revised the plan.

Vedanta had also said that the decision was taken following deliberations with stakeholders, including lenders, regarding the scheme and approval by the board of directors.

It also stressed the ongoing search for alternative avenues for restarting the copper business in Thoothukudi, Tamil Nadu, an integral part of the base metals undertaking, as the reason behind the development.

The non-implementation of the demerger of the base metals undertaking and its retention in Vedanta will not impact the overall value creation for shareholders, it said.

"A demerger of the Vedanta Base Metals undertaking may be considered at a stage when the Base Metals business evolves and matures to realise the full value potential of such demerger for shareholders," the filing had said.

Vedanta Chairman Anil Agarwal had earlier said the proposed demerger of the company's diverse verticals, which represent more than 15 commodities, will see it progress from asset managers to asset owners.

As the company passes through the transition phase, Vedanta is focusing on consolidating and strengthening its asset base to emerge as a world leader in each of its verticals, the chairman had said.

After receiving a nod from lenders, the diversified natural resources company moved to the NCLT, seeking a demerger and had expressed hopes of completing the process by the end of this fiscal year.

The demerger will help simplify the company's corporate structure by creating independent businesses. Moreover, it will offer global investors direct investment opportunities in pure-play companies linked to the country's impressive growth.

The demerger will allow the individual units to pursue strategic agendas more freely and better align with customers, investment cycles, and end markets.

From FY24 onwards, the company has been investing $1.9 billion in growth capex across its businesses.

The company reported a consolidated net profit of Rs 4,352 crore in the September quarter. It had posted a consolidated net loss of Rs 1,783 crore in the year-ago period.