LONDON–India-focused Vedanta Resources PLC (VED.LN) reported Wednesday a wider net loss in the first half of its financial year and decided it won’t pay an interim dividend as it focuses on cutting costs.
The U.K.-listed natural resources company said it will continue the merger between its Mumbai-based operating unit, Vedanta Ltd, and its oil and gas unit, Cairn India Ltd, despite opposition from some of the oil unit’s minority shareholders, including Aviva Investors. Vedanta expects the deal to close in the second calendar quarter of 2016.
Aviva Investors said the one-for-one all share offer undervalues Cairn India. The deal would give Vedanta unfettered access to Cairn India’s $2.7 billion cashpile, helping to alleviate the group’s stressed balance sheet.
Standard and Poor’s downgraded the company’s credit rating further into junk status in October on the grounds that the company’s financial performance will remain weak for the next year to year-and-a-half.
Vedanta reported Wednesday a net loss of $325 million for the first half of the year ended Sept. 30 compared with the same period a year before. Revenue fell 12% to $5.7 billion while earnings before interest, taxes, depreciation, and amortization fell 39% to $1.3 billion largely due to lower commodity prices.
Vedanta is now focused on slashing costs and paring back capital expenditure to cut its hefty net debt burden. The company reduced its net debt by 17% on year to $7.5 billion as of the end of September.