Mining conglomerate Vedanta said that it recieved a go ahead from 75 percent of its secured creditors for the proposed demerger of businesses, marking an important step in the company's plan to split into six independent listed companies.
The company will now seek clearance from the stock exchanges and will file its demerger plan with the National Company Law Tribunal (NCLT).
The company will also need to obtain approval from its shareholders for the demerger.
The demerger will create independent companies housing the aluminium, oil & gas, power, steel and ferrous materials, and base metals businesses, while the existing zinc and new incubated businesses will remain under Vedanta Limited.
Post demerger, shareholders are slated to receive shares in five new listed entities demerged from Vedanta Limited.
Vedanta's lenders include state-owned lenders like State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Indian Overseas Bank, Union Bank of India and Bank of Maharashtra. Private sector banks – Yes Bank, ICICI Bank, Axis Bank, IDFC First Bank, and Kotak Mahindra Bank are also part of Vedanta's consortium of lenders.
The approval from most creditors comes as Vedanta is making progress in deleveraging. Last week, the company raised Rs 8,500 crore through Qualified Institutional Placement (QIP), the proceeds of which will be used to repay in part or full the debt it owes to Oaktree Capital, Deutsche Bank and Union Bank of India.
By March 31, the company's net debt had decreased by Rs 6,155 crore from December 2023, totaling Rs 56,388 crore. This reduction was mainly due to robust cash flows from operations and a release of working capital.
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