Vedanta Resources to de-list from LSE, says to simplify group structure

Vedanta Resources on Monday announced that it plans to delist from the London Stock Exchange, 15 years after it had become the first Indian company to get listed on the exchange.

Volcan, a family trust belonging to founder and chairman Anil Agarwal, will buy out the shareholders of Vedanta Resources, which will be valued at a little over USD 3 billion.

"The offer price of 825 pence per share... represents a premium of approximately  27.6 percent to the closing price of 647 pence per Vedanta share on June 29, 2018; and 13.5 percent to the three-month volume weighted average price of 727 pence per Vedanta share to 29 June 2018," the company said in a statement. 

Explaining the reasons behind the move, the Group said that this was "another important step in simplifying the structure of the Vedanta Group by removing a duplicative stock exchange listing," and that the original rationale for Vedanta is now less compelling, given the increased maturity of the Indian capital markets, together with Vedanta's significant growth."

Group company Vedanta is listed on the Bombay Stock Exchange.

"The London listing has served us extremely well since that time (2003)," said Founder and Chairman Anil Agarwal in a statement.

"However, given the subsequent growth of our underlying businesses and the maturity of the Indian capital markets, together with related feedback from our shareholders and other stakeholders, we have concluded that a separate London listing is no longer necessary to achieve the Vedanta Group's strategic objectives," he added.

Forced by protests?

But industry observers say that the group's step may have been hastened by the protests in Thoothukudi, where its copper facility is located, that left 13 dead.

The group has been maintaining, like before, that the protests were part of an "international conspiracy". Earlier, too, Vedanta had cited the same reason for the international outrage to its mining project in Odisha. Amnesty International was one of the international organisations that led the protests, which took place from London to Odisha.

There is a belief that after the delisting, the mining group may not face as much heat, or attention, as before.

After the Thoothkudi firing, a leading politician from the UK's opposition Labour Party had called for Vendata to delist from the LSE. The listing, John McDonnell had said, gave the company a "cloak of respectability."

Independent committee

The Group set up an independent committee to examine the proposal to delist.

"Since being approached, the independent directors of Vedanta Resources Plc have evaluated the possible offer and have negotiated its terms," said  Deepak Parekh, Senior Independent Director of Vedanta.

The HDFC Chairman added: "We are now pleased to confirm our intention to recommend the possible offer to Vedanta's independent shareholders...and we are pleased to confirm that shareholders will also receive the announced FY2018 cash dividend of US$0.41 per share, payable in August."