Monday, 27 February 2012
Sesa Goa merges with Sterlite at 5:3 Ratio
In a major consolidation within the $ 11.4 billion Vedanta group headed by Anil Agarwal, Sterlite Industries and iron ore miner Sesa Goa have decided to merge, creating a Rs 66,000 crore entity and also the seventh largest natural resources major in the world.
The Boards of both the companies on Saturday approved the merger of Sterlite into Sesa Goa to form a new company called Sesa Sterlite.
They also okayed the issue of 3 Sesa Goa shares for every 5 existing Sterlite shares. Simultaneously, two other group companies — Vedanta Aluminium Ltd (VAL) and Madras Aluminium Company Ltd (MALCO) — will be consolidated into Sesa Sterlite.
Post consolidation, Vedanta will own a 58.3 per cent shareholding in Sesa Sterlite. Vedanta will also transfer its 38.8 per cent direct shareholding in Cairn India to a wholly-owned subsidiary of Sesa Goa at a nominal consideration of one dollar, together with the associated acquisition debt of $5.9 billion (through the transfer of companies in which such debt and shareholdings are held).
“The debt will continue to be guaranteed by Vedanta. This transfer is not inter-conditional on the merger of Sesa, Sterlite, MALCO and VAL,” Vedanta said.
After the transfer, Sesa Sterlite will have a 58.9 per cent shareholding in Cairn India. The group’s 79.4 per cent shareholding in Konkola Copper Mines Plc will continue to be directly held by Vedanta.
As per the plan, Vedanta Aluminium and Madras Aluminium will be 100 per cent consolidated into Sesa Sterlite.
Addressing a press conference in Mumbai, Anil Agarwal, Chairman of Vedanta, said: “This transaction is a natural evolution, leading to simplification of the group’s structure. Sesa Sterlite will be the principal operating company in the group and with its high quality assets, growth projects and strong management, it is well placed to create value for all shareholders.”
The Boards of both the companies on Saturday approved the merger of Sterlite into Sesa Goa to form a new company called Sesa Sterlite.
They also okayed the issue of 3 Sesa Goa shares for every 5 existing Sterlite shares. Simultaneously, two other group companies — Vedanta Aluminium Ltd (VAL) and Madras Aluminium Company Ltd (MALCO) — will be consolidated into Sesa Sterlite.
Post consolidation, Vedanta will own a 58.3 per cent shareholding in Sesa Sterlite. Vedanta will also transfer its 38.8 per cent direct shareholding in Cairn India to a wholly-owned subsidiary of Sesa Goa at a nominal consideration of one dollar, together with the associated acquisition debt of $5.9 billion (through the transfer of companies in which such debt and shareholdings are held).
“The debt will continue to be guaranteed by Vedanta. This transfer is not inter-conditional on the merger of Sesa, Sterlite, MALCO and VAL,” Vedanta said.
After the transfer, Sesa Sterlite will have a 58.9 per cent shareholding in Cairn India. The group’s 79.4 per cent shareholding in Konkola Copper Mines Plc will continue to be directly held by Vedanta.
As per the plan, Vedanta Aluminium and Madras Aluminium will be 100 per cent consolidated into Sesa Sterlite.
Addressing a press conference in Mumbai, Anil Agarwal, Chairman of Vedanta, said: “This transaction is a natural evolution, leading to simplification of the group’s structure. Sesa Sterlite will be the principal operating company in the group and with its high quality assets, growth projects and strong management, it is well placed to create value for all shareholders.”
