Vedanta approves delisting; now in process of arranging finances

Vedanta Resources revealed in a statement that the company was in the process of arranging finances for delisting upon receiving approval for the same from the shareholders last week. Previously in the month of May, the board of Vedanta Limited had authorized the proposal by the promoter to delist the company.

"We expect this to be concluded in the coming weeks, at which stage the company will apply to the stock exchanges for approval to proceed with the delisting process," the company stated.

Vedanta's resolution to delist shadows Vedanta Resources, one of the promoter group firms, making an indicative offer of Rs 87.50 to buy out all the public shareholders in the company.

The company will be filing for a reverse book building process with the bourses. The price revealed in the process must be either accepted by the acquirer or countered with another offer, which will be higher than the price offered initially. After the delisting takes place, the promoter's stake in the company is anticipated to increase to 90 per cent.

The successful privatization of Vedanta would expand Vedanta Resources' access to the subsidiary's cash flows. This will be possible because of the efficient dividend upstreaming as compared to about 50 per cent that is paid to minority shareholders.

Vedanta Limited's stock was trading at Rs 109.60, down by 0.32 per cent or Rs 0.35 per share, at 9.20 am on Monday. The 52-week high is recorded at Rs 178.90 and the 52-week low is Rs 60.30 on BSE.