Vedanta plans a demerger; banks are thinking of debt

livemint.com:

Vedanta Ltd are concerned about the lack of clarity on how their debt will be split among the various business units following the mining behemoth’s proposed demerger, said two bankers aware of the discussions. The lenders’ consortium, whose clearance is required for the merger to go through, is yet to schedule a meeting to decide on the matter. The bankers, who are part of the consortium, said the lead lender State Bank of India (SBI) has informed them that its subsidiary SBI Capital Markets (SBI Caps) is looking at the demerger proposal floated six months ago.

“Bankers have appointed SBI Caps to look at issues like division of debt, and they started work on this a few days ago. This was done so that an external expert can closely look at the demerger proposal and see how it will impact lenders," one of the two bankers said on the condition of anonymity. The lenders will meet once SBI Caps assesses the plan.

In September, billionaire Anil Agarwal-led Vedanta Ltd said it wanted to split the company into six separate listed companies housing businesses such as aluminium, power, and base metals. It is expected to be completed in the coming financial year. According to the second banker, most of the loans were given to Vedanta Ltd and they have a certain rating, “which would change depending on which new entity our loans reside in after the demerger.