Vedanta demerging key businesses

Hyderabad: Mining conglomerate Vedanta is on track for the demerger of its key businesses, including aluminium, into separate listed companies and allocation of debt across the demerged entities would be done in proportion to their assets, sources familiar with the matter said.

Vedanta is in advanced stages of engagement with its lenders on the issue, and the process has proceeded smoothly, they said. There is clarity about the allocation of debt across entities after the demerger.

“The debt will get divided amongst the resulting demerged entities in the ratio of assets getting allocated to them as per the prescribed rules and regulations,” a senior company official said at a recently concluded investor event.

Citing the example of Vedanta Aluminium, the official said the debt that would get allocated to the company would be in direct proportion to the book value of the assets held by it. This is to ensure that the transaction is tax-neutral.

Vedanta had in September last year announced the creation of demerger of metals, power, aluminium, and oil and gas businesses to unlock potential value.