InvestorQ : How does Vedanta propose to fund the delisting of the shares from the Indian stock exchanges?
Arti Chavan made post

How does Vedanta propose to fund the delisting of the shares from the Indian stock exchanges?

Answer
user profile image
diksha shah answered.
3 months ago


The parent Vedanta Resources owns nearly half of Vedanta Ltd. With a current market cap of around $5 billion, Vedanta Resources will require nearly $2.5 billion to buy out the balance shareholders and delist the company. However, at the original price of Rs.87.50 committed by VEDL, it will have to shell out less than $2 billion for the buyout.

The amount is likely to be financed through a mix of debt and equity. Vedanta Resources has confirmed that it is in the process of arranging the requisite finance for the delisting exercise. As of now, the parent company proposes to do the deal with a mix of internal and external resources. Vedanta is a cash rich group and has enough in its own books.

Last week, the Vedanta board had approved the delisting of the company through a two-third majority as was required. However, the original delisting price of Rs.87.50 is nearly 30% lower than the current market price, which is not practical. This may have to be revised. Getting approval of minority shareholders like LIC will be the real challenge.