Vedanta mulls spinning off aluminium division
15 March 2010
London-listed mining group Vedanta Resources Plc. is planning to spin-off its $20-billion aluminium division in a move to create the world's fourth largest alumunium producer, reported Britain's Telegraph newspaper yesterday.
However, the Anil Agarwal-led Agarwal family, majority owners of Vedanta, is likely to retain the controlling stakes in the demerged business.
The Economic Times, citing people familiar with the development, said today that Bharat Aluminium Company Ltd. (BALCO), in which Vedanta holds a 51-per cent controlling majority stake, with the government of India holding the rest, is not part of the demerger plan.
The FTSE 100 diversified metals and mining major has operations in India, Zambia and Australia and a strong organic growth pipeline of projects.
The new business, which could be spun off as early as this summer, is expected to be the first of a series of up to six divisions spun out of Vedanta over the next few years.
Vedanta and its advisers - Morgan Stanley, Credit Suisse and JP Morgan Cazenove - believe a series of demergers would create shareholder value by simplifying the group's structure.