New Delhi: The National Company Law Appellate Tribunal (NCLAT) has given an interim stay on the order by the Mumbai bench of the NCLT, which rejected the demerger of the power business of Vedanta Ltd., and its merger with the resulting company Talwandi Sabo Power Ltd. (TSPL).
A two-member bench wrote that it would be appropriate to grant a stay. “Thus the issues raised before us need to be considered at length and presently in view of the submissions made the scheme is severable and thus in case the stay is not granted to the impugned order it may affect the second motion application filed in respect of other three transferor companies pending in different Tribunals,” the NCLAT said in its order. The NCLAT has now listed the matter for hearing on August 04.
In an exchange filing on Thursday, Vedanta Ltd. said it remains committed to its strategic reorganization plan and continues to work towards unlocking long-term value for all stakeholders.
Following a favorable vote from shareholders and creditors in February, the mining major said in its Q4 earnings call that it had moved to a second motion petition before NCLT, and is scheduled for final hearing on 2nd of July. The management had reaffirmed the completion of Vedanta Limited’s demerger by September of this year.
As per Vedanta, its proposed demerger will help simplify its corporate structure with sector-focused independent businesses. The demerger will provide global investors, including sovereign wealth funds, retail investors, and strategic investors, with direct investment opportunities in dedicated pure-play companies linked to India’s remarkable growth story through Vedanta’s assets.
According to Vedanta, with listed equity and self-driven management teams, the demerger will provide a platform for individual units to pursue strategic agendas more freely and better align with customers, investment cycles, and end markets.
Further, Vedanta expects the demerger to unlock value and potential for faster growth in each vertical. Shares of Vedanta Ltd. are up nearly 2% in one week and more than 7% in the last one month.
