News

Vedanta Plans To Exit Steel Business, Looks To Sell Electrosteel: Report

In the summer of 2018, Vedanta beat Tata Steel to take over ESL for Rs 5,320 crore. While Electrosteel initially was a subsidiary of Electrosteel Castings, upon acquiring, Vedanta delisted the company.

Vedanta.
info_icon

Anil Agarwal-led Vedanta Group has reportedly decided to exit the steel business almost four years after it decided to make it big in it. As per a report in the Economic Times, Vedanta is planning to sell Electrosteel and focus just on its core businesses, which are mining and industrial. 

As per the report, Vedanta has approached other steel companies like Tata Steel, ArcelorMittal Nippon Steel, JSW and Jindal Steel and Power Limited and some investors as well. One of the reasons of Vedanta taking this decision is also reportedly to deleverage its balance sheet, which had a debt of $11.7 billion at the end of March.

Advertisement

While neither of the mentioned companies, as per the Economic Times, agreed to comment on this, it was Tata Steel CFO Koushik Chatterjee who told the publication that the company currently did not have any acquisitions under evaluation. 

The report adds that in the summer of 2018, Vedanta beat Tata Steel to take over ESL for Rs 5,320 crore. While Electrosteel initially was a subsidiary of Electrosteel Castings, upon acquiring, Vedanta delisted the company. At the time of the takeover, Vedanta also said that this acquisition is expected to help its iron ore business as the vertical integration of steel manufacturing capability has potential for great efficiency. 

Advertisement

As per ET, Moody’s Investors Service brought down Vedanta’s corporate family rating (CFR) and senior unsecured bonds issued by the indebted VRL. Further, in a November 7 note, Moody’s reportedly said that the negative outlook reflects company’s weak liquidity profile.

Advertisement

Advertisement

Advertisement

Advertisement