Shares of Vedanta Ltd. experienced a nearly 2% drop on February 18, 2025, ahead of a crucial creditors’ meeting scheduled for the following day. The meeting will determine the fate of the company’s plan to demerge its various businesses in India. Vedanta’s creditors will gather to vote on the proposal to divide the conglomerate into at least five separate entities, a major step in simplifying the company’s complex structure and reducing its debt burden.
The plan will be presented for approval by both secured and unsecured creditors, with a majority vote of three-fourths of the total debt value required for the plan’s implementation. If approved, the restructuring will lead to the creation of individual entities for Vedanta’s aluminum, oil and gas, power, steel, and semiconductor businesses, providing better market visibility and improving the group’s overall valuation.
The move aims to unlock value for investors, particularly those interested in Vedanta’s newer but riskier ventures, such as semiconductors, and it is expected to attract more targeted investors. While the holding company, Vedanta Resources Ltd., will remain intact, this demerger is seen as a way to streamline operations and enhance the financial stability of the conglomerate.
Vedanta Resources Ltd. has made significant strides in reducing its debt, cutting more than $4 billion over the past two years. The company plans to reduce its debt by an additional $3 billion over the next three years, and the successful demerger could pave the way for even further financial restructuring.
The company and its stakeholders remain hopeful that this plan will be approved by creditors, marking a new phase in Vedanta’s efforts to simplify its structure and improve its financial health.
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