Debt reduction is top priority of Vedanta, says chairman Anil Agarwal
Vedanta share price: The company has approved a spin-off of its metals, power, aluminium, and oil and gas businesses into separate listed entities, and an overhaul of its lucrative zinc unit (Hindustan Zinc) is planned as part of value creation and reducing debt load.
Vedanta share price: Vedanta Ltd shares hogged the limelight on Tuesday, October 3, after the mining conglomerate last week announced a major business shake-up. The company has approved a spin-off of its metals, power, aluminium, and oil and gas businesses into separate listed entities, and an overhaul of its lucrative zinc unit (Hindustan Zinc) is planned as part of value creation and reducing debt load.
Vedanta will issue one share of the five demerged businesses for every share held in the company, the firm said in a statement.
Reacting to the development, shares of the company rallied as much as 5.07 per cent to Rs 233.80 apiece on the BSE. The stock ended at Rs 230.80, up 3.73 per cent.
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The entire exercise, which would require shareholder and lender approval as well as a nod from the stock exchanges and Courts, is expected to be completed in 12-15 months, its president for finance Ajay Agarwal said. Separately, Hindustan Zinc Ltd in a statement said it could create separate legal entities for its zinc and lead, silver, and recycling businesses to help capitalise on "distinct market positions" and attract investors.
Vedanta Ltd will continue to hold 65 per cent of Hindustan Zinc Ltd. And the new businesses of stainless steel and semiconductor/display. CLICK HERE TO READ THE FULL REPORT
What Anil Agarwal says
Vedanta Chairman Anil Agarwal, in conversation with Zee Business channel on Tuesday, said that there's no match for India's growth and that the country has sufficient reserves of natural resources. The mining magnate further said that there are a lot of possibilities for the recycling business.
Agarwal further added that demerger would help in a sharp increase in growth and there would be more business opportunities. In the renewable energy transition, only base metals are important, the business tycoon said. Vedanta's Chairman further stated that reducing debt is the company's top priority, and they are fully prepared to repay debt in January. The company will reduce debt by selling assets, he added.
On the global front, Agarwal added that the Vedanta Group has less debt as compared to other companies.