Vedanta Resources Regulatory News (VED)

Vedanta Resources plc

16 Berkeley Street

London W1J 8DZ

Tel: +44 (0) 20 7499 5900

Fax: +44 (0) 20 7491 8440

www.vedantaresources.com

17 April 2018

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE SECTIONS ENTITLED "INFORMATION ON ELECTROSTEEL" AND "IMPORTANT NOTICE" AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.

Vedanta Resources plc

Update by Vedanta Limited

Vedanta Resources plc's subsidiary Vedanta Limited today made the below announcement. The Transaction constitutes a Class 1 transaction for Vedanta Resources plc for the purposes of the UK Listing Rules of the Financial Conduct Authority and therefore requires UK shareholder approval. A circular will be despatched to Vedanta Resources plc's shareholders shortly, setting out further details of the Transaction and convening a general meeting of Vedanta Resources plc to seek shareholder approval.

Vedanta Limited's Resolution Plan for acquisition of Electrosteel Steels Limited approved by National Company Law Tribunal

Further to the announcement made by Vedanta Limited (the "Company") on 31 March 2018, National Company Law Tribunal, Kolkata Bench, has today approved the terms of the Resolution Plan submitted by the Company, to acquire Electrosteel Steels Limited ("Electrosteel") pursuant to a Corporate Insolvency Resolution process implemented by way of the Insolvency and Bankruptcy Code 2016 (the "Resolution Plan"), and the terms of the Resolution Plan are now binding.

Pursuant to the Resolution Plan, a wholly-owned subsidiary of the Company will subscribe for shares of Electrosteel for an aggregate amount of INR Rs. 1,805 Crores (US$ 275.7 million)1 and provide additional funds of INR Rs. 3,515 Crores (US$ 536.9 million) by way of debt. Upon implementation of the Resolution Plan, the Company will hold approximately 90% of the paid up share capital of Electrosteel (the "Transaction"). The remaining 10% of Electrosteel's share capital will be held by Electrosteel's existing shareholders and the financial creditors who receive shares in exchange for the debt owed to them. The funds received by Electrosteel as debt and equity will be used to fully settle the debts owed to the existing financial creditors of Electrosteel, by payment of INR 5,320 Crores (US$ 812.6 million).

Electrosteel was incorporated in Ranchi, Jharkhand, India as a public company on 20 December 2006 and has been listed on the Bombay Stock Exchange and National Stock Exchange of India since 2010. Electrosteel owns and operates a greenfield integrated steel manufacturing facility near Bokaro, Jharkhand, India, which has a current capacity of 1.5 million tonnes per annum ("MTPA") and the potential to increase to 2.5 MTPA.

Electrosteel's unaudited statement of assets and liabilities as at 30 September 2017 reports the total assets of Electrosteel as INR 13,051.56 Crores (US$ 1,993.7 million)2. According to Electrosteel's statement of audited financial results for the year ended 31 March 2017, Electrosteel's total income was INR 2,867.83 Crores3 (US$ 438.1 million) and loss for that period was INR 1,463.48 Crores (US$ 223.6 million). Its latest unaudited quarterly update for the nine months ended 31 December 2017 reported a total income of INR 2,440.35 Crores (US$ 372.8 million) with a loss of INR 866.50 Crores (US$ 132.4 million). Total income for the year ended 31 March 2015 and 31 March 2016 was INR 1,846.85 Crores (US$ 282.1 million) and INR 2,904.47 Crores (US$ 443.7 million), respectively.

The directors of the Company (the "Directors") believe that the Transaction will complement the Group's existing iron ore business as the vertical integration of steel manufacturing capabilities has the potential to generate significant efficiencies. The Directors do not expect the Transaction will have any material impact on the Group's earnings for the financial year ending 31 March 2019 and anticipate returns to be received in the following years.

The consideration payable under the Resolution Plan and the transaction fees and expenses will be paid using the existing cash resources.

The Transaction is not a related party transaction under the Indian Companies Act 2013 or the Indian Listing Regulations. 

Completion of the Transaction is conditional upon obtaining applicable regulatory approvals including approval from the Competition Commission of India and the Securities and Exchange Board of India.

As part of the Transaction, the Company has submitted an unconditional and irrevocable performance guarantee of INR 100 Crores (US$15.3 million) to the committee of creditors which shall be released upon expiry of six months from the date that the National Company Law Tribunal approved the Resolution Plan.

Enquiries

Notes

1. For US dollar amounts in this announcement a rate of INR 65.465 to US$1, being the closing exchange rate on 16 April 2018, has been used.

2. The financial information in relation to Electrosteel contained in this announcement for the years ended 31 March 2016 and 2017 and the nine months ended 31 December 2017 was compiled under Indian Accounting Standards and for the years ended 31 March 2015 was compiled under Indian generally accepted accounting principles. This financial information was therefore not compiled on the same basis as for the financial results of the Company's parent company, Vedanta Resources plc.

3. This figure has been extracted from Electrosteel's audited accounts for the financial year ended 31 March 2017. Electrosteel's unaudited financial results for the quarter ended 30 September 2017 announced a total income of INR 2,844.11 Crores (US$434.4 million) for the financial year ended 31 March 2017 but the Company has not been able to confirm this figure, nor the reason for the inconsistency with the audited accounts, for reasons identified under "Information on Electrosteel" below.

Information on Electrosteel

Vedanta Limited and its advisers have had limited access to Electrosteel's non-public information and have been unable to perform any significant due diligence on such information. All information in this announcement relating to Electrosteel has been sourced from publicly available information. This information has not been subject to comment or verification by Electrosteel or its respective directors.

About Vedanta Resources

Vedanta Resources plc ("Vedanta") is a London listed diversified global natural resources company. The group produces aluminium, copper, zinc, lead, silver, iron ore, oil & gas and commercial energy. Vedanta has operations in India, Zambia, Namibia and South Africa. With an empowered talent pool globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of trust, sustainability, growth, entrepreneurship, integrity, respect and care. To access the Vedanta Sustainable Development Report 2017, please visit http://www.vedantaresources.com/media/214366/vedanta_sd_report_2016-17.pdf. For more information on Vedanta Resources, please visit www.vedantaresources.com 

Important notice

This announcement has been issued by and is the sole responsibility of Vedanta Resources plc. The information contained in this announcement is for background purposes only and does not purport to be full or complete. The information in this announcement is subject to change without notice. Subject to the UK Listing Rules, the Disclosure Guidance and Transparency Rules of the FCA and the Market Abuse Regulation (EU) No. 596/2014, the issue of this announcement shall not, under any circumstances, create any implication that there has been no change in the affairs of Vedanta Resources plc, the Company or Electrosteel since the date of this announcement or that the information in this announcement is correct as at any time subsequent to the date of this announcement.

Certain information contained in this announcement, including any information as to the Group's or Electrosteel's strategy, plans or future financial or operating performance constitutes "forward-looking statements". These forward-looking statements can be identified by the use of terminology such as, "aims", "anticipates", "assumes", "believes", "budgets", "could", "contemplates", "continues", "estimates", "expects", "intends", "may", "plans", "predicts", "projects", "schedules", "seeks", "shall", "should", "targets", "would", "will" or, in each case, their negative or other variations or comparable terminology. Forward-looking statements appear in a number of places throughout this announcement and include, but are not limited to, express or implied statements relating to the Group's business strategy and outlook; the Group's and Electrosteel's future results of operations; the Group's and Electrosteel's future financial and market positions; expectations as to future growth; general economic trends and other trends in the industry in which the Group or Electrosteel operates; the impact of regulations on the Group and Electrosteel and their respective operations; and the competitive environment in which they operate.

By their nature, forward-looking statements are based upon a number of estimates and assumptions that, whilst considered reasonable by the Directors and Vedanta Resources plc, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those indicated, expressed or implied in such forward-looking statements. Forward-looking statements are not guarantees of future performance. Any forward-looking statements in this announcement reflect the Directors' and Vedanta Resources plc's current view with respect to future events and are subject to certain risks relating to future events and other risks, uncertainties and assumptions. The forward-looking statements contained in this announcement speak only as at the date of this announcement. The Directors and Vedanta Resources plc disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in their expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the UK Prospectus Rules, the UK Listing Rules, the UK Disclosure Guidance and Transparency Rules of the FCA and the Market Abuse Regulation (EU) No. 596/2014 . You are cautioned against placing undue reliance on any forward-looking statement in this announcement.

Lazard & Co., Limited, which is authorised and regulated by the FCA in the United Kingdom, is solely providing sponsor services (as such term is defined in the FCA Glossary) to Vedanta Resources plc in connection with the Transaction and will not be responsible to anyone other than Vedanta Resources plc for providing the protections afforded to its clients or for providing advice in connection with the Transaction. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard & Co., Limited in connection with this document, any statement contained herein, the Transaction or otherwise.

A copy of the Circular when published will be available from the registered office of Vedanta Resources plc and on Vedanta Resources plc's website at www.vedantaresources.com. Neither the content of Vedanta Resources plc's website nor any website accessible by hyperlinks on Vedanta Resources plc's website is incorporated in, or forms part of, this announcement.