Vedanta to delist from LSE; chairman Anil Agarwal buys remaining company stake

Anil Agarwal’s discretionary trust’s investment vehicle, Volcan, which owns a 66.53% stake in the London-listed Vedanta, has agreed to acquire the rest of its shares at a total offer value of £8.25 ($10.89) per share, according to a regularly filing released on Monday July 2.

The offer price represents a 27.6% premium over its closing share price on June 29, putting the capital value of Vedanta at £2.325 billion, the company said.

Vedanta will apply to cancel its listing on the LSE’s main board when the offer is confirmed and acceptance has been received from independent shareholders.

Being the first Indian company listed on LSE in 2003, Anil Agarwal described the delisting move as “a natural progression” to simplify the group structure.

“The London listing has served us extremely well since that time. However, given the subsequent growth of our underlying businesses and the maturity of the Indian capital markets, together with related feedback from our shareholders and other stakeholders, we have concluded that a separate London listing is no longer necessary to achieve the Vedanta Group’s strategic objectives,” the Indian industrialist said.

Vedanta’s 400,000 tonne per year Tuticorin copper smelting complex has been shut since March and remains indefinitely closed under orders of the local Tamil Nadu government, following violent protests.

The shutdown of Tuticorin, run by Vedanta subsidiary Sterlite, which processes over 1 million tonnes concentrates per year, has led to a series of knock-on effects, including a diversion of concentrates into the spot market.

Copper concentrate treatment and refining charges (TC/RCs) rose sharply in late June, with the Tuticorin shutdown and production disruptions at several Asian smelters giving Chinese plants greater buying power. 

The Metal Bulletin TC/RC index firmed to $79.80 per tonne/7.98 cents per lb on June 29 from $77/7.7 cents in the middle of the month. Terms have risen over 11% in a month from $71.60/7.16 cents at the end of May.

Vedanta Resources’ shares had lost 22% of their value in the year to June 29. On Monday following the announcement, the company share price surged by 26.6% to £818.7 as of 11:47am.