Vedanta Limited said that it has dropped its restructuring plans which involved hiving off and listing three of its businesses after its board found the present structure to be “optimal”.
The company had in November said that it would consider the hiving off and separate listing of its aluminium, iron and steel, and oil and gas businesses as standalone entities.
“The board of directors concludes that the current structure is optimal and is commensurate with the current scale and its diversified lines of businesses,” the company said in a press statement.
Vedanta Limited’s London-based holding company Vedanta Resources was weighing several options to unlock value from the Indian company to pare its debt. There was even a consideration of merging Vedanta Resources with Vedanta Limited, Bloomberg reported.
The company now plans to continue unlocking cash through dividends. In its press statement, Vedanta Limited said that at least 30% of its profits will be given out as dividends. Dividend from subsidiary Hindustan Zinc Limited will be passed through within six months, as per its dividend policy, subject to the board’s evaluation.
Vedanta Resources is 100% owned by Volcan, which also holds majority stakes in Konkola Copper Mines, Sterlite Technologies and Sterlite Power Transmission. In a separate statement, Vedanta Limited said that Volcan’s various stakes are worth around $17 billion against its outstanding debt of $10 billion.
“The Company has strong cashflows from dividends and brand fees, which are sufficient to service its debt obligations,” the statement read. “The Company’s priority remains to accelerate deleveraging.”
Vedanta Limited also said that it will be bidding to acquire state-run Bharat Petroleum.
The company also announced its intent to invest up to $500 million over the next 2-3 years in its subsidiary AvanStrate Inc which manufactures LCD glass.
Source: Economic Times