Vedanta's Strategic Decision: Retaining Base Metals for Future Growth

Vedanta Ltd announced it will retain the Base Metals undertaking after revising its demerger plans. The decision, driven by stakeholder discussions, aims at optimal debt allocation. The demerger will create independent companies, except Base Metals, thereby retaining shareholder value. Vedanta will invest in growth after securing creditor approval.

Vedanta Ltd, a major mining conglomerate listed in Mumbai, has announced a revision to its demerger proposal, opting to retain its Base Metals undertaking within the main company. This decision follows discussions with stakeholders, including lenders, and was approved by the board of directors during a Friday meeting.

Initially, Vedanta planned to split its existing businesses into six independent entities, including Vedanta Aluminium, Oil & Gas, Power, Steel and Ferrous Materials, Base Metals, and Vedanta Ltd. However, lenders believe maintaining the Base Metals within Vedanta will optimize debt allocation and enhance value creation.

The company is also exploring avenues to restart its copper business in Thoothukudi, Tamil Nadu, a key part of the Base Metals division. While the demerger scheme's terms, such as share entitlement, remain unchanged, Vedanta will consider a future demerger for Base Metals as the business matures, ensuring shareholder value is maximized.

(With inputs from agencies.)