Vedanta constitutes a new board to evaluate value unlocking measures

Mining giant Vedanta has decided to set up a new board to undertake a comprehensive review and evaluate options of demergers, spin-offs, and strategic partnerships to unlock value and simplify the company's corporate structure.

The new committee of directors will evaluate and recommend options and alternatives to the Board of Directors. 

"Subject to a detailed evaluation, it is the intention that the Aluminium, Iron & Steel, and Oil & Gas businesses would be housed in standalone listed entities," the company said in a statement.

"Over the past few years, the group has materially improved the operational performance of the businesses, increased cash flows, reduced debt whilst concomitantly focusing on accelerating investments in energy transition, health and safety, diversity and ESG in general," said Anil Agarwal, Chairman, Vedanta. 

The company's statement says that the objective is to simplify and streamline corporate structure, unlock value for stakeholders, create better-positioned businesses to capitalise on their distinct market positions, and tailor capital allocation policies based on business-specific dynamics. 

In addition, the company aims to target distinct investment profiles to attract deeper and broader investor bases and accelerate emissions reduction and strong ESG practices. 

The Board has also appointed various advisors to assist them in evaluating the options. 

"This step, which we announced today, whilst pending a detailed evaluation, is designed to create independent, industry-leading, global public companies, where each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees," said Agarwal.