Vedanta’s promoters cannot dispose of shares: Lender

The promoters of mining major Vedanta, a subsidiary of London-headquartered Vedanta Resources (VRL), cannot sell or dispose of their shares in the Indian company due to a charge created earlier. The move gains importance as Vedanta had pledged almost 95% of its holdings in Hindustan Zinc (HZL), including a recent one three days ago.

A charge was created on all the issued shares of Vedanta, following an earlier agreement signed in 2020-21 with Vedanta group promoter entities. The charge includes restrictions that include selling, transferring or otherwise disposing of any of the shares held by the promoters or to be acquired by them in Vedanta, OCM Verde XI Investments, a lender to Vedanta, said in a stock exchange update.

OCM Verde is an entity under asset manager Oaktree Capital.

Pursuant to two deeds – global and an Indian deed on May 23, 2023 – a charge created on all the issued shares of FICL in favour of OCM has been released. However, the charge on the issued shares of the Vedanta Holdings Mauritius and Westglobe, and the restrictions on the promoter group entities on creation of any security, or to sell, lease, transfer or otherwise dispose of any of their shares in VEDL, continue to be in force, it said.

On May 23, a global deed of release was executed amongst the promoters (OCM, Finsider International Company (FICL), Westglobe, Richter Holding and Vedanta Holdings Mauritius II). However, the Indian deed on the same day was executed amongst Axis Bank, Axis Trustee Services, FICL, Westglobe and Vedanta Holdings Mauritius II).

The move gains importance, as of Thursday, Vedanta had pledged almost 95% of its holdings in Hindustan Zinc (HZL), including a recent one three days ago. This is an increase from 87.59% shares pledged to raise funds. As of March 31, 2023, 240.27 crore shares or 87.59% of Vedanta holding in HZL were pledged, with promoters holding 274.31 crore or 64.92% of the total 422.53 crore shares of HZL.

The move gains importance, as of Thursday, Vedanta had pledged almost 95% of its holdings in Hindustan Zinc (HZL), including a recent one three days ago.

Vedanta holds a 64.92% stake in Hindustan Zinc (HZL), which was privatised more than two decades ago, while the Indian government holds a 29.54% stake. VRL and other promoters own 68.1% stake in Vedanta.

As of Thursday, Vedanta had pledged almost 95% of its holdings in Hindustan Zinc (HZL), including a recent one three days ago. This is an increase from 87.59% shares pledged to raise funds. As of March 31, 2023, 240.27 crore shares or 87.59% of Vedanta holding in HZL were pledged, with promoters holding 274.31 crore or 64.92% of the total 422.53 crore shares of HZL.