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Billionaire Anil Agarwal’s commodities group will return money raised from banks and bondholders after a plan to delist its Indian unit failed.

Vedanta Resources Ltd. will repay $1.4 billion raised via bonds and another $1.1 billion in loans, with a small amount of interest, as early as this week, according to people with knowledge of the matter. It comes after minority shareholders last week scuppered a plan to take Vedanta Ltd. private, throwing the spotlight on its debt load and whether they’ll try to delist again.

A representative for Vedanta declined to comment.

Once the biggest shareholder of Anglo American Plc, Agarwal’s commodities ambitions can draw close scrutiny and even investor ire. The purchase of a $200 million economic interest in Anglo by a Vedanta unit prompted a slump in shares and a slew of downgrades amid questions about the complexity of the deal and who held voting rights. The billionaire exited his investment last year, pocketing an estimated $200 million to $300 million after fees.

“Agarwal has been in the eye of the storm, first for corporate governance, then for merging unlisted Vedanta companies, so investors were really angry with him," said Sanjiv Bhasin, director at IIFL Securities Ltd. “The stock has immense value and the business has turned. Astute shareholders will not sell the share at a discount."

The attempt to take Vedanta private follows a series of moves by Agarwal to simplify his investments, including delisting London-based parent Vedanta Resources in 2018 and merging an oil unit with Vedanta Ltd.

Vedanta’s delisting plan was approved back in May, with some analysts at the time raising concerns about a lack of shareholder enthusiasm. When the offer closed on Friday, it fell short of the 1.34 billion public shares it needed to proceed.

The company hasn’t made any decision on whether it will propose a delisting again as it’s still very early days, said the people familiar, asking not to be identified because the matter is private.

Earlier this year, Vedanta took an impairment of 17,132 crore ($2.3 billion) on account of its oil and gas business, which reduced its book value ahead of the planned delisting. The nature and timing of the asset writedown should have been questioned by shareholders, proxy advisory firm Institutional Investor Advisory Services India Ltd. said last week.

Dividend payout

Large shareholder Life Insurance Corporation of India indicated it sought prices as high as 320 . Shares of Vedanta rose 2.8% after closing 20% lower Monday, its biggest drop since 2008.

CLSA India pointed to dividend payouts as one way to help parent Vedanta Resources reduce its debt load, one of the goals of the proposed delisting. The company has a standalone debt of $6.7 billion and, of this, a term loan of $1 billion to $1.4 billion is due in 2021-22, analysts Indrajit Agarwal and Vikash Jain wrote in a note to clients.

Capital allocation will dominate investor concerns instead of operational performance, and an increase in inter-company loans to the parent will be perceived as negative for minority investors, they said.

The failed delisting is an “additional scar" for Vedanta, Ritesh Shah and Chintan Shah, analysts at Investec Capital Services Ltd., said in a report. Investor focus will now shift to the company or parent’s debt maturity covenants, dividends and, “more importantly, management’s ability to restore minority confidence in lieu of recurring corporate governance issues."

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