Billionaire Anil Agarwal has unveiled a Rs 16,200 crore plan to buy the 49% public stake in his mining major Vedanta Ltd to take the listed company private. In an exchange filing on Tuesday, Vedanta informed the market regulator that the company will offer Rs 87.5 per share to purchase 185 crore shares of 49% minority stake in the company. “Vedanta Resources Limited has expressed its intention to, either individually or along with one or more subsidiaries, acquire all fully paid-up equity shares of the Company that are held by the public shareholders of the Company and consequently voluntarily delist the Equity Shares from BSE and NSE,” the company said.
Currently, the promoter group holds over 176 crore shares, excluding the American Depositary Shares aggregating to 51.6% of the company. The delisting offer price of Rs 87.5 per share is at a premium of 9.9% over the closing market price of Rs 79.6, as on Monday. However, on Tuesday the stock price surged over 12% to end the day’s trading session at a price of Rs 89 per share. “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. Vedanta Group maintains its strategic priority of attaining leadership in diversified natural resources, underpinned by growth, while maintaining a flexible capital structure,” the company said.
Vedanta said that the proposed offer will help public shareholders realise immediate and effective value of their shares, amidst a volatile equity market. The delisting will help align Vedanta’s capital and operational structures, streamline the process of servicing the Group’s financing obligations and significantly improve a range of important credit metrics. “ As a result, the transaction is expected to support an accelerated debt reduction program in the medium term and, in turn, support the Group’s highly attractive longer-term growth pipeline,” Vedanta said. However, the company has said that Hindustan Zinc Limited will continue to remain listed in India.
The share price of Vedanta has fallen 42% since the beginning of the year from Rs 154.5 apiece to Rs 89 per share. Vedanta said it has been pursuing a process of corporate simplification for several years, including the merger of Sterlite with Sesa Goa to form Sesa-Sterlite in 2012 and the subsequent merger of Cairn India with Vedanta in 2016. The delisting of Vedanta Ltd was termed as the “next logical step in this simplification process”. Anil Agarwal’s net worth currently stands at $3.1 billion according to Forbes.