By Tanvi Mehta
NEW DELHI (Reuters) – Taiwan’s Foxconn has decided to withdraw from a $19.5 billion semiconductor joint venture with Vedanta, the latest business challenge for the Indian conglomerate led by Chairman Anil Agarwal.
Here are some details on Vedanta and its recent challenges:
HOW VEDANTA STARTED
Anil Agarwal started his business in Mumbai as a scrap-metal dealer and bought his first company, a cable manufacturer, in 1976. He then expanded his empire across India, Zambia, Namibia, Ireland and South Africa and later entered the oil and gas sector.
London-headquarted Vedanta Resources controls the India unit, Vedanta Ltd. Agarwal took Vedanta Resources private in 2018. As of 2022, his net worth was $2 billion, ranking him 97th among India’s richest, according to Forbes.
Vedanta diversified in 2017 when a unit bought a stake in Japan’s LCD glass substrate manufacturer AvanStrate. Agarwal’s son-in-law Akarsh Hebbar currently heads Vedanta’s display and semiconductor business.
DEBT WOES
Vedanta Resources has been plagued by a rising debt pile. Credit ratings agency Moody’s downgraded its rating on the company, while others raised concern about risks of a debt default.
Agarwal said in March there have been no debt defaults by the group. Vedanta’s gross debt stood at $6.8 billion as of April end, after the company completed 75% of its debt reduction commitment.
FOXCONN JV
Vedanta-Foxconn had sought incentives from Prime Minister Narendra Modi’s government and several Indian states for its Foxconn JV to manufacture semiconductors.
Foxconn pulled out of the JV on Monday, less than a year after it was a signed. Concerns about incentive approval delays by India’s government aided Foxconn’s decision to pull out of the venture, a source familiar with the matter told Reuters.
Reuters reported in June that the JV was proceeding slowly as Vedanta-Foxconn had got on board STMicroelectronics for licensing technology, but India’s government wanted the European chipmaker to have a bigger role, like a stake in the partnership.
OTHER DISPUTES
Vedanta’s copper smelter in Tamil Nadu was shut down after 13 people died in 2018 when police fired on environmental protesters calling for the closure of the plant. Vedanta has now offered to sell the plant, having repeatedly denied allegations of the smelter being polluting.
Activists and locals have for years blocked Vedanta’s plans to mine bauxite in the green, jungle-clad Niyamgiri hills in Odisha state in eastern India which the tribe people consider sacred.
In Zambia, a long-running dispute over Vedanta’s Konkola Copper Mines (KCM) is close to being resolved, mines minister Paul Kabuswe said earlier this month. Relations between Zambia and Vedanta broke down several years ago and culminated in the state appointing a liquidator for the KCM assets in May 2019.
(Reporting by Tanvi Mehta; Editing by Aditya Kalra and Sonali Paul)
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