InvestorQ : With the delisting plan failing, what is the road ahead for Vedanta India?
indhumathi Sayani made post

With the delisting plan failing, what is the road ahead for Vedanta India?

Answer
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2 weeks ago


With the actual demand book for the buyback of Vedanta shares falling way below the 134 billion shares required to buy back the shares, the company had not choice but to give up on plans to delist the stock from the Indian bourses.

It is estimated that LIC may have played spoilsport by quoting a bid of Rs.320 for the buyback. This was way about the best case price of Rs.140-150 that Agarwal and his holding companies were willing to offer for the shares against the floor price of Res.87.50.

Now that the delisting deal has failed, Vedanta will refund the money raised from banks and bondholders. Vedanta had created a huge war chest of $3.15 billion which included $1.4 billion raised via bonds and $1.1 billion raised via loans to bankroll the delisting.

After the deal fell through, Vedanta is not planning to pursue the delisting for the time being. That means it would repay the loans taken immediately to avoid paying any interest on these loans. However, corporate governance issues are nothing new at the group.

Many shareholders have also questioned the timing of the recent $2.3 billion write-down on its oil assets. Vedanta Resources has a huge debt problem and clearly it has been trying to corner the entire ownership of the Indian entity so as to use the cash reserves of subsidiaries.