John Meyer, analyst at Fairfax, said the stock market launch would allow Vedanta, which had net debt of $1.6bn at the end of September, to shore up its balance sheet ahead of the Cairn acquisition. “The Cairn deal will stretch Vedanta, so spinning off this asset helps them to share risk,” he said.
Vedanta said last week that net debt as a percentage of capital employed is expected to rise from 11.6 per cent to “less than 40 per cent” after it completes the acquisition. Prominent shareholders have pressed Vedanta, in which the Agarwal family has a majority stake, to simplify its corporate structure. Sterlite Energy, its power generation unit, is another possibility for a public listing. – Financial Times