Vedanta bid to revamp group turns bumpy as voters stall

CNBC-TV18's Sajeet Manghat reports that the Vedanta management is confident of winning shareholder approval.

Vedanta chairman Anil Agrawal’s plans to undertake a mega merger of companies in the group seems to have run into rough weather. The EGM convened on Tuesday in Panaji, Goa to pass two key resolutions saw opposition from institutional investors.

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The two key resolutions that were put up for voting included the merger of Sterlite , Sterlite Energy and Malco with Sesa Goa and second, the merger of Vedanta Aluminium with Sesa Goa.

Institutional advisory body IIAS suggested voting against the resolutions. The Sesa management says it has received 19.5 crore shares or 22.4% of equity in proxy vote for the first resolution and 21.89 crore shares or 25.2% of equity in proxy vote for the second resolution.

Sources now indicate that both the resolutions received around 22.4% in proxy votes. Questions were also raised by a shareholder on the valuation and merger ratios decided by the management.
 
According to a brokerage report, several custodians who voted on behalf of institutions, voted against the resolutions. The report also adds that this was the first instance where such a high rate of proxy voting was witnessed and it could put the merger schemes at risk.

With both the resolutions concurrent, shareholders will have to vote in favour of both for the merger to go through. And a 19.8% proxy vote in favour of both resolutions is crucial for the scheme to be approved.

With stakes increasing, the Sesa Goa promoter-group which owns 55.3% stake participated by voting in favour of the resolutions.

But the management is confident. Vedanta sources say requisite votes will be garnered for the merger proposal to go through. The outcome of Sesa Goa's proxy vote will be issued on June 25. Meanwhile, the Vedanta group gears up for the Sterlite EGM in Tuticorin on June 21.