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Abu Dhabi, UAESaturday 15 December 2018

London-listed Indian miner Vedanta Resources to go private 

Move may signal a broader deal with bigger miner Anglo American

A Vedanta factory in Orissa, India. The firm's mining arm is to be delisted. Reuters
A Vedanta factory in Orissa, India. The firm's mining arm is to be delisted. Reuters

Vedanta Resources' chairman Anil Agarwal will take the London-listed miner private on October 1, his family trust said on Monday, a step seen by some in the industry as a prelude to a potentially broader deal with bigger miner Anglo American.

The Volcan Investments trust, which held about two thirds of Vedanta's London-listed arm before it announced a approximately $1 billion buyout offer in July, said holders of 26 percent of shares had agreed to sell.

Volcan now holds or has received acceptances for 92.31 per cent of Vedanta's shares, it said, adding the offer would remain open for acceptances from shareholders until further notice.

Mr Agarwal has said he wanted to buy out the London listing, which is dwarfed by Vedanta's Indian operation, to simplify the company's structure. Analysts and fund managers have said the move could also reduce the scrutiny the company has received as a result of leaks and fatalities.

Industry players have speculated too that Mr Agarwal, who holds almost 20 per cent of Anglo American, wants some form of tie-up with the global miner, and they see the move on Vedanta Resources as a step to creating a more saleable group.

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Indian newspaper Mint reported in early July that Mr Agarwal was seeking to merge Vedanta with Anglo's South African unit and Srinivasan Venkatakrishnan, formerly head of Johannesberg-listed AngloGold Ashanti has just taken over as CEO of Vedanta Resources.

Mr Agarwal, who is Anglo American's biggest shareholder through his family trust, has played down speculation he is seeking a tie-up with Anglo.

However, he has indicated that he wants to grow Vedanta into a major diversified player.

Volcan had been expected to face some shareholder resistance to the buyout.

Vedanta's international operations are copper mines in Zambia and Vedanta Zinc, with operations in South Africa and Namibia. A tie-up with Anglo American would give the Indian firm access to diamonds, copper, platinum, coal, iron ore, nickel and manganese markets.

The appointment of Mr Venkat, who worked with AngloGold for 18 years and led it for five, follows a bounce in metals prices that has prompted Vedanta to expand zinc and aluminium output, bolstering a recovery from the commodities price slump that ended in 2016.

The first Indian company to list in London in 2003 in a £500 million (Dh2.36bn) offering, Vedanta is also waiting to hear from a judicial committee on whether it can reopen a copper smelter in southern India that was shut by authorities after violent protests in which 13 were killed.