Vedanta, the world’s largest miner, has received board approval for the proposed delisting of its share from local bourses after taking into record a due diligence report dated May 18, 2020 by SBI Capital Markets.
The board also approved the company’s plan to seek shareholders approval for the delisting proposal through special resolution through postal ballot and e-voting.
Billionaire Anil Agrawal owned Vedanta received a letter dated May 18, 2020 from Vedanta Resources (VRL) informing the company that the floor price of the delisting proposal is Rs 87.25. The letter was accompanied by a certificate issued by Price Waterhouse & Co. VRL had informed its willingness to accept equity shares tendered in the delisting offer at a price of Rs 87.5. It has proposed to buy 48.9% shares of Vedanta.
Meanwhile, the final offer price for the delisting proposal is to be determined in accordance with the reverse book building mechanism.
Last week, Vedanta unveiled its plan to delisted from the exchanges, meaning investors holding shares of world’s largest miner will have to surrender their shares to the promoter who wish to take their company private.
The move is aimed at further simplifying the corporate structure and help service debt better. With aluminium and oil prices remaining gloomy for too long and no one putting money in it, the promoters decided that it is best to delist.
At present, promoters hold 51.06% in the company and the remaining 48.94% is held by public shareholders. Assuming all shares are accepted at the indicative offer price, the promoters will have to pay Rs 16,200 crore.
The promoter and members of the promoter group, VRL expressed their intention to, either individually or along with one or more subsidiaries, acquire all fully paid-up equity shares of the company held by the public shareholders and consequently voluntarily delist the equity shares from the BSE and NSE.
Among major institutional investors in Vedanta, LIC holds 6.37%, ICICI Prudential Equity Arbitrage Fund holds 5.03%, and Citibank New York, NYADR Department holds 4.37%.
Meanwhile, Hindustan Zinc, a wholly-owned subsidiary of Vedanta, will continue to remain listed on the Indian bourses.
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