InvestorQ : How does Vedanta propose to fund the buyout of public shares pursuant to the delisting plan?
Dawn Cherian made post

How does Vedanta propose to fund the buyout of public shares pursuant to the delisting plan?

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Dilmini Mercia answered.
3 months ago
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Vedanta Resources plans to raise $2.5 billion to $2.75 billion to fund the delisting of its main India unit. Vedanta Resources owns half of Vedanta Ltd and will have to make an open offer to buy the balance half through the reverse book building process. Vedanta has already secured shareholder approval with 2/3 majority to begin the delisting process.

It may be recollected that the chairman, Anil Agarwal, had laid out his plan to simplify the structure and this delisting is in line with that broad game plan. Vedanta is a complex group of companies with interests in zinc, aluminum, copper as well as oil and gas. With recent volatility in commodity prices, listing was becoming an overhang on the company.

Financing proposals will be fully backed by dividends and cash flows from group companies like Hindustan Zinc. The first tranche will be $1.75 billion followed by another tranche of $1 billion. Both parts of the funding rely heavily on dividends from Hindustan Zinc with the first tranche also partly dependent on existing cash at the unit.

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