Vedanta Demerger Moves Ahead After NCLT Nod For Talwandi Sabo Power
The Mumbai bench of the tribunal approved the demerger scheme filed by Talwandi Sabo Power Ltd. and Vedanta.
The National Company Law Tribunal on Friday approved Vedanta Ltd.'s demerger of its power business, clearing the final hurdle for the major rejig in the mining conglomerate.
The Mumbai bench of the tribunal approved the demerger scheme filed by Talwandi Sabo Power Ltd. and Vedanta.
The final nod comes after TSPL settled with China’s Sepco Electric Power Construction Corp. (Sepco), one of the creditors that had objected to the demerger for alleged non-payment of dues worth Rs 1,251 crore.
Talwandi Sabo Power is engaged in the generation, transmission and distribution of power for supply to the state electricity boards, power utilities, generating companies, transmission companies, distribution companies, etc.
Under the revised Vedanta demerger scheme, the company has proposed to spin off four of its businesses into respective subsidiary companies, each to be listed on the stock exchange. The base metals business will be retained within the parent company.
Shareholders will receive one share in each of the four new companies for every Vedanta share held, while the parent entity will continue to retain its stake in Hindustan Zinc Ltd.
The demerger was proposed to streamline operations, improve management focus, and unlock shareholder value.
Vedanta shares ended 1% higher at Rs 609.9 on the BSE, ahead of the announcement, compared to a 0.7% decline in the benchmark Sensex. The stock has risen 39% in the last 12 months. Of the analysts tracked by Bloomberg with coverage on this stock, 10 have a 'Buy' call, and four have a 'Hold' rating.
