On Friday, October 6, mining company Vedanta Limited formed a new wholly-owned subsidiary for its aluminium business named Vedanta Aluminium Metal. Registered in Maharashtra, India, the newly incorporated subsidiary will have authorised and subscribed capital of INR 1,00,000, representing a share of Re 1 each.
This move is part of the implementation of demerging and separately listing business units into independent “pure play” companies on September 29. The objective is to attract investments into the expansion and growth of each of the business units.
Vedanta will create six companies, each as big as the parent firm, Vedanta Resources. Shareholders owning one share of Vedanta Limited will receive an additional one share of each listed company.
Vedanta Limited Board already approved late September the formation of the asset-owner business model, which will transform into six separate listed companies as given below:
1) Vedanta Aluminium
2) Vedanta Oil & Gas
3) Vedanta Power
4) Vedanta Steel & Ferrous Materials
5) Vedanta Base Metals
6) Vedanta Limited
Anil Agarwal’s vision behind this demerger is to simplify the corporate structure, offer investors the flexibility to invest in the commodity of their choice, and allow individual units to form their own strategic agenda.
Each listed company will have its own CEOs, who will also be a stakeholder in the company. Vedanta will hold 100 per cent stake in Vedanta Aluminium Metal and has paid for the share capital in cash.
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