Reverse book building for Vedanta to start soon

Mumbai: The much-awaited reverse book building process for delisting the metals and mining giant Vedanta is likely to start early next week as the company is expected to get the stock exchange approval in a day or two, sources told ET.The reverse book building process is likely to be open for five days and will allow minority shareholders to effectively discover the price for the delisting.Vedanta Resources last week in an exchange filing said that it has availed a credit facility of $3.15 billion by pledging its 50.13 per cent stake in Vedanta. The funding includes a $ 1.75 billion of three-month term loan and a $1.4 billion additional funding of three-year amortising bonds with 13 per cent yield, primarily to be used to buy out the minority shareholders in Vedanta.This amounts to around Rs 23,200 crore and implies that funding arrangement of minimum Rs 127 per share is in place based on shares held by the public shareholders including American Depository Receipts (ADRs).The final exit offer price will be determined through eligible bids during the reverse book building process, which takes the shareholding of the promoter group to 90 per cent. The promoters held 50.14 per cent stake in the company including ADRs as on June 30, 2020. Public shareholders held 45.10 per cent of the equity shares and 4.39 per cent of ADRs. As per the delisting norms, the holders of ADRs are not entitled to participate in the delisting offer, unless converted to equity shares.Hence for the successful reverse book building, promoters will need 39.86 per cent of 45.10 per cent public shareholding at a strike rate of 88.39 per cent. LIC, the largest public shareholder in the company, held a 6.37 per cent stake as on June 30, 2020. Three mutual funds, ICICI Prudential, HDFC and SBI, together owned 8.97 per cent at the end of the June quarter. Email queries to Vedanta did not elicit any response.

from Economic Times https://ift.tt/3390pI9