Vedanta has initiated a strategic review of its steel and steel raw materials businesses and may sell a part or all of these businesses. The natural resources conglomerate is looking to sell Electrosteel Steels a little over five years after it acquired the company through the insolvency process in 2018.
“The review will begin immediately and will evaluate a broad range of options to maximise stakeholder value, including but not limited to a potential strategic sale of some or all of the above mentioned steel businesses,” the company told exchanges in a filing on Friday.
In November, ET had reported that Vedanta is looking to sell Electrosteel Steels, and had reached out to prominent steel majors in the country including Tata Steel, JSW Steel, Jindal Steel and Power, and ArcelorMittal Nippon Steel, apart from a group of financial investors.
Vedanta owns 95.5% in Electrosteel Steel, and had a planned steel-making capacity of 2.51 million tonnes and a commissioned capacity of 1.5 million tonnes in 2018. Under Vedanta, the company has launched a massive expansion in Bokaro and Goa, and a greenfield unit in Bellary, Karnataka.
Vedanta has now engaged advisors to assist it in this review, and said that it will make further announcements in due course.
The company counts oil and gas, aluminium and zinc among its major businesses, and also has a presence in power, iron ore and copper businesses.
At Electrosteel Steel, total production grew 2% on year to 1.28 million tonne in 2022-23 (April-March), while the margins dropped to dropped to $32 per tonne from $74 per tonne a year ago.
The announcement to review the business comes at a time when Vedanta’s parent – Vedanta Resources – has several debt obligations.
Source: Economic Times