Here is the latest on the Vedanta demerger plan. Vedanta has informed the National Company Law Tribunal that the Company will issue a corporate guarantee in favour of the Ministry of Petroleum and Natural Gas (MoPNG) once the Scheme becomes effective.
As per the Vedanta spokesperson, “This is in the event Malco Energy (“MEL”) is unable to meet or satisfy potential contractual liability, if any, towards the Petroleum Ministry under the Production Sharing Contracts and Revenue Sharing Contracts (pertaining to the oil and gas blocks).”
The proposed demerger, the company stated, “is a strategic step to unlock long-term value by creating sector-focused, pure-play businesses with independent management teams.”
Vedanta says SEBI has no further comments on merit of demerger scheme
As per a report by CNBC-TV18, the Securities and Exchange Board of India and the central government have also objected to the Vedanta demerger.
The report says that SEBI has issued a ‘warning’ to Vedanta, while the centre has serious objections to the matter. However, the Vedanta spokesperson confirmed to Financial Express.com that “SEBI has confirmed it has no further comments on the merits of the Scheme, and it had issued an administrative cautionary letter over a procedural lapse.” The company spokesperson further elaborated that this “letter carries no financial or operational restrictions, and the matter has already been disclosed by the Company. The company has received NOCs from stock exchanges on the modified Scheme.”
SC decision on Talwandi Sobo has no bearing on Vedanta demerger
The Supreme Court of India upheld the decision of the Appellate Tribunal for Electricity on the Talwandi Sabo Project. This is as per a report by CNBC-TV18. Earlier, the Appellate Tribunal for Electricity ordered that Vedanta’s Talwandi Sabo project was not a legitimate entity for deemed export benefits.
The Vedanta spokesperson clarified that “certain reports linking the Supreme Court’s August 19 judgement to the demerger are misplaced. The judgement pertains to a legacy contractual matter concerning Talwandi Sabo’s appeal regarding customs duty benefits under the Mega Power Policy and has no bearing on the demerger process. Vedanta is reviewing the order and evaluating legal options.”
The company further stated that “Vedanta remains committed to driving sustainable growth while safeguarding the interests of its investors, partners, regulators, and the country at large.”
Vedanta share price drop
The Vedanta’s share fell by 2.32 per cent intra-day on Wednesday. The company’s stock opened at Rs 451.8 per share and fell to Rs 439 per share by 1 PM.