Three SAIL Subsidiaries up for Sale again
Three SAIL Subsidiaries up for Sale again – After mobilising $3.15 billion to fund the delisting of its Indian subsidiary, Vedanta Resources Ltd. has approached the Securities and Exchange Board of India for necessary approvals to start out the reverse book building process, sources within the know of the event said.
With the planning to delist Vedanta Ltd, company in May from the Indian stock exchanges by buying out non-promoter shareholding.
Sources said the firm is expecting to receive SEBI approvals by early next week, post which it’ll launch reverse book building and invite bids from public shareholders.
The reverse book building process is probably going to be open for five days and can allow public shareholders to effectively discover the worth for the delisting.
The ‘final exit offer price’ are going to be the worth at which equity shares, accepted through eligible bids, will take the shareholding of Vedanta Resources to a minimum of 90% of the paid-up equity share capital of Vedanta Ltd.
The public shareholding in Vedanta Ltd. is currently at 49.49% or 183.98 crore shares.
When contacted, a Vedanta spokesperson said that the corporate is functioning to require all “necessary approvals” for the reverse book building but refused to comment any longer .
When Vedanta had announced its intention to voluntarily delist its Indian subsidiary in May 2020, it set an indicative floor price of Rs 87.5 per share.
While the indicative floor price led to some skepticism, Vedanta Resources has since then mobilised $3.15 billion to fund the delisting — $1.75 billion from banks for a 3-month term loan facility and another $1.4 billion from 3 year-amortising bonds.
Basis the outstanding public shareholding, if Vedanta Resources utilises the whole amount of $3.15 billion, it can now pay a maximum delisting price of up to Rs 128 per share.
From the 52-week low of Rs 60.30 of March 30, 2020 now at Rs 125, the worth are going to be quite double and a premium of Rs 37.5 per share or nearly 43% from the indicative floor price of Rs 87.5,” the source said, adding this is often the simplest offer within the current scenario.
Sources said all financing options are exhausted by the promoter and there’s no other avenue of fundraising.
Debt financing at Hindustan Zinc or Vedanta Ltd. isn’t available to Vedanta Resources for the aim of delisting while the three-year bonds, which are priced at 13% dollar-denominated yield, reflect the severe constraints within the availability of financing for the proposed delisting, they said.
On the opposite hand, delisting within the price band of Rs 125 to 128 per share offers an honest opportunity for public shareholders to understand immediate and 100% cash value amid volatile and unsure markets. the worth of Rs 125-128 per share is additionally at a hefty premium of the share’s value of Rs 89.38 as on March 31, 2020.
The outlook for the commodity cycle remains uncertain and hazy. The proposed transaction eliminates the potential impact of future record risks for current public shareholders, sources added.
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