Vedanta To Delist American Depositary Shares On NYSE
Vedanta Ltd. will delist its American depositary shares from the New York Stock Exchange as trading volumes in such instruments have remained low in the recent past.
Trading in such securities will be suspended in 10 days after Oct. 29, when the company intends to file a form 25 with the U.S. Securities and Exchange Commission, it said in an exchange filing.
As many as 4.33% of Vedanta's equity shares are in the form of depository shares, according to data available on the Nasdaq website. Vedanta has 16.11 crore shares listed as such instruments, with each ADS representing four domestic shares. The data also shows 137 institutional investors owning 38,055,720 depository shares in the mining conglomerate.
The delisting, the company said, was also prompted by the associated costs of maintaining listing and related obligations, including reporting obligations in accordance with the U.S. Securities Exchange Act of 1934.
Processes Involved In Delisting
Once the delisting becomes effective and criteria for deregistration have been satisfied, the company would submit a form 15F with the U.S. market regulator to deregister the ADSs and their underlying equity shares.
Thereafter, the company’s reporting obligations under the Exchange Act will be suspended. Deregistration with the SEC and termination of Vedanta’s reporting obligations under the Exchange Act will become effective 90 days after filing of form 15F.
As per procedure, Citibank, N.A. will provide a notice of termination to all ADS holders. The ADS programme will be terminated 31 days after Citibank serves a formal notice to the ADS holders. The bank will sell the company’s equity shares underlying the ADS any time after Dec. 9—or once 30 days elapse following the termination of the deposit agreement, which is Nov. 8.
The ADS holders will have at least 61 days after receiving the notice of termination to decide on retaining their interest in the equity shares. They can surrender their depositary shares in exchange for underlying ordinary shares on or prior to Dec. 8.