There is a new news regarding the business of mining company Vedanta Limited. In fact, the National Company Law Tribunal (NCLT), Mumbai Bench has approved a scheme of arrangement related to Vedanta’s subsidiary companies. Let us tell you that Vedanta’s subsidiary companies include Talwandi Sabo Power Limited (TSPL), Vedanta Aluminum Metal Limited, Malco Energy Limited, Vedanta Base Metals Limited and Vedanta Iron and Steel Limited.
What was the reasoning given?
According to the arguments filed in the tribunal, Vedanta Ltd said that the nature of risks and competition in the power business is different from Vedanta’s other natural resource verticals, which requires a separate entity to provide focused and better capital market access. NCLT also took note of operational continuity and directed that all employees working in Merchant Power Undertakings shall become employees of TSPL without any interruption or break and on terms and conditions not less beneficial than their existing employment. There is going to be a lot of change in the financial profile of the new company formed through this restructuring.
Estimated net worth to be Rs 8207 crore
Citing the certificate of the independent auditor, the tribunal’s order states that the net worth of Talwandi Sabo Power is estimated to increase from Rs 3,606 crore before the demerger to Rs 8,207 crore after the demerger. In contrast, after the transfer of assets, the net worth of Vedanta Limited is estimated to decline from Rs 46,533 crore to Rs 43,230 crore. The order confirms that the share entitlement ratio for the demerger of Merchant Power Undertaking will remain 1:1. The share capital of TSPL will be commensurate with the shareholding of the demerged company, which will ensure that existing Vedanta shareholders retain their proportionate share in the new company. Talking about Vedanta shares, it closed at Rs 609.90 on Friday. The stock registered a gain of 1.05% compared to the previous day.