INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Mining mogul Anil Agarwal today said his plan to delist his flagship Vedanta Resources Plc from London Stock Exchange and take it
private is no way linked to the Tuticorin incident and is merely an exercise to simplify a sprawling business empire.
Agarwal, who launched
a USD 1 billion offer to buy the 33.65 per cent stake of Vedanta that his family trust does not own, while on a cruise with family in the
Mediterranean, said the liquidity of Indian markets now means that the need for a separate London listing is no longer critical.
The move to
delist Vedanta came weeks after killing of 13 protesters in police firing at the firm's copper smelter plant in Tamil Nadu last month that
led to political opposition to the company in the UK and drop in its share price
There were demands from some quarters that the firm be delisted from London Stock Exchange.
Asked if the decision was linked to the turn of
events at Tuticorin, Agarwal said: "No link at all
This is driven by the desire to simplify the corporate structure".
Vedanta, which owns copper, aluminum, iron ore, oil and steel businesses,
has been facing environmental pressure on its operations
Protesters at Tuticorin were demanding the closure of Vedanta's copper smelter when they were fired upon by the police.
Agarwal said there
will be no material impact of delisting on the businesses.
"The rationale for the move is two-fold
One, corporate simplification
We have been simplifying for years, through the merger of the Indian companies to create Vedanta Limited, and then the merger of Cairn India
This transaction is a logical next step in that process.
"Two, increasing maturity of Indian markets
The liquidity of Indian markets now means that the need for a separate London listing is no longer critical," he told PTI.
Volcan, a holding
company owned by a trust controlled by Agarwal, yesterday announced an intention to make a USD 1 billion offer to buy the 33.65 per cent of
Vedanta at 825 pence per share.
He said yesterday's announcement was an intention to make an offer
"It is expected that an offer will be made in 28 days
That offer will be open for a certain period of time governed by UK rules (3-6 weeks), following which the process will be completed."
Asked
how the share purchase will be funded, he said Volcan has the financing for the offer lined up and will announce details before the formal
offer.
If his offer goes through, Agarwal will be left with just two Mumbai-listed companies -- Vedanta Ltd, that produces everything from
oil and gas to copper, and Hindustan Zinc Ltd.
"Post delisting, there will be two listed entities: Vedanta Ltd and HZL
Both are listed in India, and Vedanta Ltd also has an ADR listing on the New York Stock Exchange," he said.
Vedanta Resources listed on
London in December 2003, raising just over 500 million pounds from a sale of shares at 390 pence.
Agarwal said there is no plan "at this
stage" to further consolidate the subsidiaries under one umbrella.
While its Tuticorin plant has been shut down, Vedanta's iron ore business
too has been hit by the Supreme Court, ordering a suspension of mining in Goa, where most of its iron ore mines are located
The company's mines in Karnataka, however, continue to operate
It recently entered the steel business by acquiring bankrupt Indian firm Electrosteel.
Vedanta Resources owns 50.1 per cent of Vedanta Ltd
and has near 65 per cent holding in Hindustan Zinc
It also owns 79.4 per cent of Konkona Copper Mines in Zambia, Africa.
