Indian billionaire Anil Agarwal, the biggest shareholder in mining company Anglo American, said on Thursday he was divesting the nearly 20 percent stake he has held since 2017. CNBC-TV18 spoke to Srinivasan Venkatakrishnan, CEO and GR Arun Kumar, CFO of Vedanta.
“If you remember the original transaction that was done at the Volcan level, which is a trust and it was for the investment purposes all along. With hindsight that has actually been proved right in terms of the gains. When Vedanta entered into the investment in December, we were very clear that we were doing it as part of our treasury management activities to deliver superior returns and we did say it would deliver superior returns and we are pleased to report that USD 100 million has actually comeback,” Venkatakrishnan said on Friday.
“We at Vedanta don’t have the right to unwind this investment ahead of 2020, but Volcan has agreed, in the interest of all of the shareholders, to give us this right, realise some parts on all of the gains from the transaction over to Vedanta shareholders. Now whether the listed entity will be used for such structured investments in future, and the answer is this will not be used for any such investments in the future,” he added.
Speaking about the global ambitions, Venkatakrishnan said, “There is no strategy change in terms of our global ambitions. Our portfolio is quite robust. We are excited about the opportunities that we have in South Africa.”
Talking about the returns that has been generated, GR Arun Kumar said, “If you have observed, we entered into the rump of 24 million shares the economic upside in December 2018 and approximately 17.50 pounds which represented about USD 550 million of principal which actually happened to be the gain of Volcan at that point of time. On top of it, we have made another USD 100 million, so that is the way to look at this transaction. Both Volcan 2-2.5 years to do what they have said as well as what we said in February when we announced it along with our results that it is pretty much investment for both the companies and objective is to make cash flow gains is exactly what has happened. Now it is all unwound, there is nothing called Anglo or Anglo economic interest either in Volcan or in Vedanta Limited subsidiaries.”