Vedanta gets approval of its 75% secured creditors for demerger

The company will next seek clearance from stock exchanges and submit its demerger plan to the National Company Law Tribunal (NCLT).

Vedanta will also require approval from its shareholders for the demerger.

The demerger will result in independent companies for the aluminium, oil & gas, power, steel and ferrous materials, and base metals segments, while the existing zinc operations and newly incubated businesses will remain under Vedanta Limited.

Following the demerger, shareholders are expected to receive shares in five new listed entities created from Vedanta Limited.

Vedanta's consortium of lenders includes state-owned banks such as State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Indian Overseas Bank, Union Bank of India, and Bank of Maharashtra. Private sector banks like Yes Bank, ICICI Bank, Axis Bank, IDFC First Bank, and Kotak Mahindra Bank are also among Vedanta's lenders.

The approval from the majority of creditors coincides with Vedanta's ongoing efforts to reduce debt. Last week, the company raised Rs 8,500 crore through a Qualified Institutional Placement (QIP), with the proceeds intended to partially or fully repay debt owed to Oaktree Capital, Deutsche Bank, and Union Bank of India.

As of March 31, Vedanta's net debt had decreased by Rs 6,155 crore since December 2023, bringing the total to Rs 56,388 crore. This reduction was largely driven by strong operational cash flows and the release of working capital.