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Vedanta to complete steel asset sale this fiscal year, says Anil Agarwal


Debt-laden Vedanta Ltd will complete the divestment of its steel assets by March 2024, the group’s chairman Anil Agarwal told an Indian TV channel, while the metals-to-oils conglomerate plans to demerge its business units into independent ‘pure play’ companies to unlock value.

Steel assets will get sold in this fiscal year, Agarwal told CNBC-TV18 channel.

Vedanta had started the review of its steel and steel raw material business in June.

On Sep 29, whil announcing the plans to spin off, the company said Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Metals, Vedanta Base Metals and Vedanta Limited are the new proposed entities.

“By demerging our business units, we believe that will unlock value and potential for faster growth in each vertical. While they all come under the larger umbrella of natural resources, each has its own market, demand and supply trends, and potential to deploy technology to raise productivity,” Agarwal said last week.

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Vedanta Resources, the UK-based parent of Vedanta Ltd, has been struggling to raise funds due to rating downgrades and concerns about meeting its debt obligations.Agarwal sought to trim the group’s debt by getting Hindustan Zinc, a unit of Vedanta Ltd, to buy some of the parent group’s zinc assets in a $2.98 billion deal. However, the Indian government, which owns nearly 30% stake in Hindustan Zinc, opposed the move.On Friday, HZL had also said it plans to create separate entities for its zinc, lead, silver and recycling businesses to unlock “potential value” and will appoint external advisors to review its corporate structure.

Concerns over bonds worth $3.2 billion maturing in 2024 and 2025 are at the centre of Vedanta’s crisis as it has been struggling to raise funds. Debt obligations at Vedanta Resources include a $1 billion bond due in January, $950 million bonds due in August, and $1.2 billion maturing in March 2025, apart from other loan repayments.

Agarwal today said Vedanta Resources will honor all payments due in 2024.


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