Sesa Goa Ltd has acquired all outstanding shares of V S Dempo Co and Ltd for Rs 1,750 crores. This acquisition will entail Sesa Goa with 100 per cent equity shares of Dempo Mining Corp and 50 per cent equity shares of Goa Maritime Private Ltd.
The acquisition is on a debt-free cash-free basis and includes networking capital of Rs 145 crore. The deal has been funded by Sesa Goa’s existing cash resources which on March 31, 2009, were to the tune of Rs 4,143 crore.
“We are highly delighted with this opportunity to consolidate our iron ore business,” said Anil Agarwal, chairman, Vedanta. “The integration of Sesa and VSD's operations will achieve great synergy.”
VSD has iron ore reserves of nearly 70 million tonnes in Goa and is the one of the largest exporters in the region. The deal marks one of the biggest acquisitions of all time in the domestic iron ore sector.
VSD's mining assets include processing plants, barges, jetties, transhippers and loading capacities at Mormugoa port. It produced 3.94 million tonnes of iron ore and sold 4.36 million tonnes in 2008-09.
"This agreement with Sesa Goa will ensure long-term sustenance of VSD's operations," said Shrinivas V Dempo, CMD, Dempo Group.
Sesa Goa itself is the largest exporter of iorn ore in the private sector with mining operations in Goa, Karnataka and Orissa.