Vedanta Resources Plc moved a step closer to merging two of its Indian subsidiaries after the Madras High Court approved the company's plan to simplify its group structure.
The mining conglomerate had said early last year that it planned to overhaul its web of subsidiaries, creating an umbrella unit that will group most of its assets.
Under the consolidation plan, the company's copper unit Sterlite Industries will be merged into its iron ore unit Sesa Goa to create a new entity Sesa Sterlite.
London-listed Vedanta Resources controlled by billionaire Anil Agarwal, hopes that the restructuring will attract investors who have been put off by its complex structure and help pay down its huge debt pile.
The company said the Goa Bench of the Bombay High Court had approved the restructuring on April 3.
However, a Sesa Goa shareholder had filed an appeal before the division bench of the court.
Hearings before the division bench were completed and the order was awaited, Vedanta said.
"Securing both High Court approvals further increases our confidence in the restructuring ultimately reaching a positive conclusion," Liberum Capital analyst Ash Lazenby said in a note.
Lazenby said the restructuring plan apart from creating a simplified structure would reduce Vedanta's debt servicing charge from $500 million annually to $190 million annually by moving majority of the debt into the newly formed Sesa Sterlite.
Vedanta was valued at 3.15 billion pounds at its Wednesday close.
Shares in Vedanta, were down 0.9 percent at 1167 pence at 1520 GMT on the London Stock Exchange, largely in line with the broader FTSE-100 index.
Copyright: Thomson Reuters 2013