Mumbai: Soon after miner Vedanta Resources Plc. said it was shelving its proposed restructuring, Tarun Jain, responsible for strategic financial issues at the London-listed company and director of finance at Sterlite Industries India Ltd, clarified in an interview that the group still plans to simplify its structure over the long term, but at a more appropriate time. Mint spoke with Jain after the announcement. Edited excerpts:
Why has the company decided to call off restructuring plans?
After we announced our plans to restructure the group businesses, we went on a long roadshow that took us from Singapore, (to) the US and London. A lot has happened in the financial markets since then, and investors are not able to focus properly on our restructuring proposals.
What were the reactions from investors?
It was a mixed reaction. But let me clarify that this move will not hold back our business. It will be business as usual.
Will you look at restructuring once market conditions improve?
It (restructuring) can wait. Ultimately, we believe that there is no point pushing it down anybody’s throat. I wish to reiterate again that this will not affect our growth plans.
Will Sterlite’s management review restructuring plans once market sentiments improve?
Our long-term vision is to simplify our structure. We will do it at an appropriate time after taking feedback from our stakeholders.
Did the management call off the restructuring after shares in your main group companies were hammered in India as well as in London?
The world has changed since we announced on 9 September our plan to simplify the group’s structure. Four global banks have collapsed since then. The investors don’t want to look at new things.
Apparently, The Childrens Fund (an activist hedge fund that owns more than 1% of Vedanta) was against the restructuring?
We approached almost 20-25 top investors at our roadshows. We explained our proposals, but received a mixed response. And we are willing to listen to them.
Were top Indian shareholders such as LIC (Life Insurance Corp. of India) also against the proposal?
They had nothing specific against the deal. Again, let me tell you that it was a mixed feeling that we got.
The markets have taken well to your decision to shelve the restructuring. Sterlite shares have soared. Can you tell us how the Vedanta shares are faring in London?
We don’t know. We didn’t get the time to look at the markets. (Vedanta shares had lost 4.7% around that time, but Sterlite shares on Bombay Stock Exchange (BSE) soared about 10% after the announcement. In late afternoon trade in London, Vedanta shares were down 6.68% at £14.25, while Sterlite shares closed at Rs487.55 each, up 8.36% on BSE.