Vedanta To Seek Shareholder Nod To Transfer Rs 12,500 Crore To Retained Earnings
Anil Agarwal-promoted Vedanta is seeking shareholders' approval on Oct. 11 for capital reorganisation of the company.
Anil Agarwal-promoted Vedanta Ltd. is seeking shareholders' approval on Oct. 11 for capital reorganisation of the company.
The shareholder meet to approve the scheme between Vedanta and its shareholders is being held as per the directions of the Mumbai bench of the National Company Law Tribunal, according to an exchange filing. The meeting will be chaired by UK Sinha, former chairman of Securities and Exchange Board of India and independent director on the board of the company, the company said in the filing.
As part of the scheme of arrangement, the company plans to move its general reserves to retained earnings. The scheme, if approved by the shareholders, will allow the company to use the amount for payment as dividend to all shareholders including the promoters which own close to 70% of the company.
The general reserve of the company was Rs 12,587 crore as on March 31, 2021. The company did not transfer any surplus out of the Rs 17,245 crore profits of 2022.
Vedanta has total secured debt of Rs 35,267.60 crore and unsecured debt of Rs 15,382.96 crore as of June 30, 2022.
Vedanta Resources Ltd., the parent of Vedanta Ltd., is facing challenges in refinancing its debt. The company already has already pledge the entire promoter's equity of the listed company worth over Rs 81,000 crore.
S&P Global Ratings said in April that dividends from Vedanta Ltd., which is 70%-owned by its London-based parent, will likely contribute to a large part of Vedanta Resources’ debt servicing as refinancing over the next six months becomes more challenging.