Vedanta Resources plans to spin off $20bn aluminium division

Vedanta Resources, the mining group, could become the latest FTSE company to push for a demerger after property giant Liberty International unveiled plans last week to demerge into two businesses.

The India-based mining group has drawn up plans to spin-off its $20bn (£13bn) aluminium division. The new business, which could be spun off as early as this summer, would be the world's fourth largest alumunium producer.

The move is expected to be the first of a series of up to six divisions spun out of Vedanta over the next few years.

Vedanta and its advisers – Morgan Stanley, Credit Suisse and JP Morgan Cazenove – believe a series of demergers would create shareholder value by simplifying the group's structure.

Vedanta is majority owned by the Agarwal family, which is likely to retain the controlling stakes in the demerged businesses.

The group is expected to apply to the Indian courts to demerge the aluminium business, a process that could take some months. Talks are continuing over the potential demerger and the timing of any move remains uncertain.

As little as 15pc of the division would likely be floated, initially in Mumbai and then potentially in London or New York.

Vedanta's Zambian copper business is thought likely to follow the aluminium division as the next business to be spun off.

Source: www.telegraph.co.uk