Shares in India-focused miner Vedanta rose almost 4% in early trade after it announced plans to simplify its structure by placing all but one of its subsidiaries under an umbrella unit, as part of efforts to improve access to cash.
FTSE-100 miner Vedanta, which has underperformed the UK sector by more than 25% since the start of last year, currently has a sprawling structure with a string of subsidiaries, none fully owned and several separately listed, producing power and commodities from oil and gas to iron ore.
As a first step in the overhaul, Vedanta said on Saturday it would merge non-ferrous metals producer Sterlite Industries into sister concern and iron ore miner Sesa Goa to create Sesa Sterlite, the eventual umbrella unit for other subsidiaries.
At 1:30pm shares in Vedanta were trading at 1,550 pence, up 3.3% and outperforming a 1.2% drop in the UK mining sector.
"Should the deal complete, Vedanta has solved the top two issues pinning back shares: a complex corporate structure causing value leakage with cross holdings raising corporate governance concerns, and the ability to service PLC debt," Liberum analysts said in a note.
