July 25 (Reuters) - Vedanta Resources Plc moved a
step closer to merging two of its Indian subsidiaries after the
Madras High Court in India approved the company's plan to
simplify its group structure.
The mining conglomerate had said early last year that it
planned to overhaul its web of subsidiaries, creating an
umbrella unit that will group most of its assets.
Under the consolidation plan, the company's copper unit
Sterlite Industries will be merged into its iron ore
unit Sesa Goa to create a new entity Sesa Sterlite.
London-listed Vedanta Resources controlled by billionaire
Anil Agarwal, hopes that the restructuring will attract
investors who have been put off by its complex structure and
help pay down its huge debt pile.
The company said the Goa Bench of the Bombay High Court had
approved the restructuring on April 3.
However, a Sesa Goa shareholder had filed an appeal before
the division bench of the court.
Hearings before the division bench were completed and the
order was awaited, Vedanta said.
"Securing both High Court approvals further increases our
confidence in the restructuring ultimately reaching a positive
conclusion," Liberum Capital analyst Ash Lazenby said in a note.
Lazenby said the restructuring plan apart from creating a
simplified structure would reduce Vedanta's debt servicing
charge from $500 million annually to $190 million annually by
moving majority of the debt into the newly formed Sesa Sterlite.
Vedanta was valued at 3.15 billion pounds ($4.82 billion) at
its Wednesday close.
Shares in Vedanta, were down 0.9 percent at 1167 pence at
1520 GMT on the London Stock Exchange, largely in line with the
broader FTSE-100 index.