Vedanta says stake sale talks baseless; shares tumble
1 min read 23 Mar 2023, 11:36 AM ISTShares of Vedanta fell as much as 6% on the BSE in Thursday's early trading session
PremiumIndian billionaire Anil Agarwal-led Vedanta Ltd said on Thursday that talks of any stake sale in the mining major was "untrue and baseless", reported Reuters, after a media report that the tycoon was weighing selling less than 5% stake in the company.
Agarwal is studying options including selling a minority stake in Vedanta as he looks to shrink his commodities business empire's massive debt load, Bloomberg News reported, citing people familiar with the matter. Shares of Vedanta fell as much as 6% on the BSE in Thursday's early trading session.
Vedanta’s shares have fallen about 32% in the last 12 months, giving it a market value of about $12.6 billion. A 5% stake is worth about $630 million. A stake sale in Vedanta is a last resort for the billionaire and will only be considered if other fundraising options fail, as per the Bloomberg report.
Agarwal’s Vedanta Resources Ltd., which owns about 70% of Vedanta, has been in talks with at least three banks for a loan of as much as $1 billion, Bloomberg News reported earlier this month. The discussions are ongoing and no final decisions have been made on the loan.
Vedanta Resources may rely on dividends from its subsidiary Hindustan Zinc Ltd. to help repay the $400 million worth of dollar-denominated bonds due in April, according to a Bloomberg Intelligence report. Hindustan Zinc on Tuesday said it will pay an interim dividend of 26 rupees a share, or a total of about 110 billion rupees ($1.3 billion).
The Vedanta Group in January agreed to sell a zinc manufacturing business to its subsidiary Hindustan Zinc for $2.98 billion in phases over 18 months. The Indian government, which owns about 30% of Hindustan Zinc, strongly opposed the deal.
