NCLT reserves judgment on Vedanta demerger as government raises ₹16,700 crore claims

The government on Wednesday (November 12) renewed its objection to Vedanta Ltd's proposed demerger, citing pending claims of ₹16,700 crore that it argued could be put at risk by the restructuring, as the National Company Law Tribunal (NCLT) concluded hearings on the matter and reserved its judgment.

The government noted that pre-demerger, Vedanta had an asset base of over ₹2 lakh crore, whereas post-demerger, the oil and gas entity would have an asset base of only ₹29,150 crore, resulting in a significant reduction in the asset coverage ratio.

Also Read: Vedanta shares fall after government objects to demerger, SEBI issues warning

Authorities also flagged Vedanta’s alleged failure to disclose liabilities tied up in ongoing litigation, pointing out that arbitral proceedings for Rajasthan oil blocks are underway. At the very least, $222 million would be payable to the government, a figure that could swell to ₹1,162 crore, the government argued.

Vedanta rebutted the objections, stating that the government had previously raised concerns over loans being raised on oil and gas rights and asserting that it had submitted No Objection Certificates (NOCs) from eight banks to address the concerns.

The company added that even after the demerger, government claims would be protected by assets 1.8 times the claimed amount. The company further noted that it is not required to disclose liabilities until a final order is passed confirming the claims.

Also Read: Vedanta Q2 Results: Aluminium business EBITDA aids growth, margins expand