Vedanta To Hold Creditors Meet On Demerger Plans In February
Vedanta To Hold Creditors Meet On Demerger Plans In February
It aims to list various entities by June quarter
With the National Company Law Tribunal (NCLT) approving the demerger application of Vedanta in November 2024, the creditors meeting will take place in February. A shareholders' meeting is also likely within the 90-day deadline.
Vedanta had filed the demerger scheme with the tribunal in August last after an approval from three-fourths of its creditors.
Announced in September 2023, estimating the process to be completed in 12-15 months, the demerger scheme involves creating six entities by the natural resources major.
The entities are Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Limited.
If the creditors consent to the company's proposed demerger, it will pave the way for listing various entities by June quarter.
Recently, the company decided to retain base metals within Vedanta, citing that a demerger would be considered when the business evolved. This change in the scheme of arrangement is unlikely to impact the regulatory proceedings.
Speaking on the matter, Himanshu Vidhani, partner at law firm Chandhiok and Mahajan said, "A company needs approvals from shareholders, creditors, sector-specific regulators, Income Tax authorities and the regional director of the Registrar of Companies (RoC) before the final approval from the tribunal.”
Vedanta's key creditors are the State Bank of India, Bank of Baroda, Canara Bank and Union Bank of India. Its key shareholders include Life Insurance Corporation of India, which had a 6.96 percent stake in the company at the end of December, while promoters held a 56.38 percent stake.
