Vedanta receives approval for demerger from majority creditors, stock rises

In September 2023, Vedanta announced the creation of demerger of metals, power, aluminium, and oil and gas businesses to unlock potential value.

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Shares of mining major Vedanta have rallied more than four percent over the past two sessions after a majority of its lenders approved its demerger plans.

"I am happy to inform you all that we have got 52 percent plus the additional percentage that we need to reach 75 percent. We have crossed that threshold as well. Most of the lenders have approved it," said a senior Vedanta official in a bondholder conference call.

At 11.10 am, Vedanta shares on NSE were quoting at Rs 454.5 apiece, higher by one percent.

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"Some are pending for their committee meeting and some are pending for their board meeting. So, as we speak, we have already received 52 percent. The balance requirement will be met in a week or 10 days' time. And thereafter, we will file the application with the NCLT," he added.

State Bank of India, a major creditor, had already granted its consent earlier, according to a banker aware of the development.

This crucial approval is seen as the last major compliance requirement for the company, which was keenly watched by the market, and paves the way for the $20-billion demerger.

In September 2023, Vedanta announced the creation of demerger of metals, power, aluminium, and oil and gas businesses to unlock potential value. After the exercise, six independent verticals - Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Limited - will be created.

For every share of Vedanta, shareholders will receive one share of each of the five newly listed companies. After the demerger, the businesses of Hindustan Zinc as well as the electronics business will remain with Vedanta Limited.

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