Veteran banker Omar Davis, who is leading the Vedanta group reorganisation, steps down
NEW DELHI: According to persons acquainted with the situation, Omar Davis, a seasoned banker who was in charge of Vedanta Group’s restructuring, quit the metals giant less than a year after taking on the position, severely hurting its attempts to cut down on a multibillion-dollar debt burden.
They asked not to be identified because the material is confidential, but they said that Davis, who was appointed president for strategy at Vedanta Resources Ltd. last year, was collaborating closely with the company’s financiers and investors to supervise its massive makeover, which was revealed in September.
In January, the firm successfully negotiated an extension of the maturities of three dollar bonds with creditors.
The mining billionaire Anil Agarwal’s intentions to split up India firms Vedanta Ltd. and Hindustan Zinc Ltd. into many legal entities in order to generate money and streamline a convoluted financial structure may be impacted by the resignation. One of the most experienced bankers covering the mining industry, Davis joined Vedanta after almost 20 years with Bank of America Corp. Davis was assisting Agarwal with the transformation.
A request for comment from a Vedanta Group spokeswoman was not immediately answered. Davis opted not to respond.
According to an exchange filing dated March 20, Vedanta Resources intends to cut its debt by $3 billion over the next three years and lower its standalone borrowings to less than $3 billion. Vedanta Ltd.’s parent company, located in London, intends to reduce its debt without taking on more, the statement said.
Restructuring the company is still a risky proposal that has to be approved by regulators, lenders, and shareholders. The group’s use of its own shares in Vedanta Ltd. and in Hindustan Zinc, a significant cash-generating company, to secure loans may also be a major issue.
At 9:20 a.m. on Thursday, Vedanta Ltd.’s shares increased by 3% in Mumbai trade, while Hindustan Zinc’s shares increased by 2.6% to reach their highest point in eight months.
