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Twin Star Holdings, an Anil Agarwal-owned promoter entity, is selling a 4.3 percent stake in its India-listed subsidiary, Vedanta Ltd, to raise up to $500 million to repay the debt of parent company Vedanta Resources.
Its shares would be sold Thursday morning and have been offered at a 5 percent discount to Wednesday's closing price of Vedanta Ltd at Rs 272 apiece, according to terms of the transaction. The promoters currently own 68.11 percent of Vedanta Ltd. The company’s valuation was Rs 1.01 trillion as of Wednesday.
In the past few months, Vedanta Resources, a London-based company also owned by Agarwal, has taken several steps to pay its debt and now analysts expect it to be successful at servicing its debt maturities of around $2 billion in the next 12 months.
The latest fundraising exercise by selling shares in the Indian listed subsidiary will help the promoter entity repay the debt maturing in the coming months, banking sources said.
The group promoter entities are on a fundraising spree as have raised $1.3 billion by taking an $850-million loan from JPMorgan, a $250-million loan from Oaktree Capital, a $200-million loan from Glencore, and a $200-million loan from commodity trader, Trafigura. The promoters also raised funds by getting higher royalty payments from its Indian subsidiary.
In the financial year ended March 2023, Vedanta Ltd paid a record dividend of Rs 37,758 crore to its shareholders, thus helping its parent entity repay debt.
The government is looking to sell a part of its 49% stake in Balco through a public offer and is engaging with the firm’s promoter Vedanta to withdraw arbitration and facilitate the listing of the company, department of Investment and public asset management (Dipam) secretary Tuhin Kanta Pandey said.
The Ministry of Mines and Dipam have held ‘preliminary talks’ with Vedanta — the promoters of the erstwhile public sector company, he said. Balco has to withdraw a 2009 arbitration case it filed against the government over a valuation dispute of the residual stake.
“We will engage with them in detail. If we have to do a public listing, they (Vedanta) will have to withdraw the case. If they agree, then we can move forward,” he said. The government wants to sell part of its stake in an IPO before exiting the company. A listing would give an idea of the fair valuation of Balco. The government had in 2001 sold a 51% stake in the then state-owned Bharat Aluminium Company (Balco) to a subsidiary of Vedanta for Rs 551 crore.
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