Debt-laden Vedanta Ltd will complete the divestment
of its steel assets by March 2024, the group’s chairman Anil Agarwal told an
Indian TV channel, while the metals-to-oils conglomerate plans to demerge its
business units into independent ‘pure play’ companies to unlock value.
Steel assets will
get sold in this fiscal year, Agarwal told CNBC-TV18 channel.
Vedanta had started
the review of its steel and steel raw material business in June.
On Sep 29, whil
announcing the plans to spin off, the company said Vedanta Aluminium, Vedanta
Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Metals, Vedanta Base
Metals and Vedanta Limited are the new proposed entities.
“By demerging our
business units, we believe that will unlock value and potential for faster
growth in each vertical. While they all come under the larger umbrella of
natural resources, each has its own market, demand and supply trends, and
potential to deploy technology to raise productivity,” Agarwal said last week.
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Vedanta Resources, the UK-based parent of Vedanta Ltd, has been struggling to
raise funds due to rating downgrades and concerns about meeting its debt
obligations.Agarwal sought to trim the group’s debt by getting Hindustan Zinc,
a unit of Vedanta Ltd, to buy some of the parent group’s zinc assets in a $2.98
billion deal. However, the Indian government, which owns nearly 30% stake in
Hindustan Zinc, opposed the move.On Friday, HZL had also said it plans to
create separate entities for its zinc, lead, silver and recycling businesses to
unlock “potential value” and will appoint external advisors to review its
corporate structure.
Concerns over bonds
worth $3.2 billion maturing in 2024 and 2025 are at the centre of Vedanta’s
crisis as it has been struggling to raise funds. Debt obligations at Vedanta
Resources include a $1 billion bond due in January, $950 million bonds due in
August, and $1.2 billion maturing in March 2025, apart from other loan
repayments.
Agarwal today said Vedanta Resources
will honor all payments due in 2024.