Vedanta to announce rejig of Indian operations today

Anil Agarwal-led Vedanta Group is expected to announce its much-hyped restructuring on Saturday under which Sterlite Industries might be made the holding company to control India operations.

A formal announcement on the restructuring is likely to be made at Mumbai on Saturday.

The proposed restructuring, according to sources, would result in reducing the debt of Vedanta group by over $2 billion.

The rejig may include a possible merger of Sesa Goa with Sterlite Industries, industry sources said, although it could not be verified from the Vedanta officials .

In their separate filings to the BSE, both Sterlite and Sesa Goa said, "A meeting of the Board of Directors of the company will be held on February 25 to consider restructuring proposals of the company."

According to sources, the 38.8 per cent shares directly held by Vedanta in Cairn India could also be transferred to Sterlite.

At the same time, the restructuring would also result in improved cash flows for the Vedanta group, which is aiming at buying the Government's remaining stake in Hindustan Zinc and BALCO, the sources said.

The rejig would be confined only to its Indian operations and won't include the African business, whose valuation was reportedly the main reason for a similar attempt in 2008 that failed.

Vedanta Resources bought majority stake Konkola Copper mine in Zambia in 2004, but its attempt to bring the company under the fold of Sterlite was aborted following strong protest from shareholders who alleged that the exercise was meant to benefit the promoters.

Rating agency Standard and Poor's had yesterday said that the proposed restructuring could take time to materialise as the company could face obstacles in getting regulatory and shareholder approvals.

"The proposed restructuring is subject to approvals from a number of minority shareholders and regulators in the UK and India. In our opinion, the restructuring will take time to implement because it could face difficulties in getting these approvals," it had said.

Sterlite's shares on Friday closed 3.17 per cent higher at Rs 118.65 a piece at the BSE over the previous day's closing.

Sesa Goa's scrip was, however, down by 0.13 per cent at Rs 227.35 per share.