Despite having a cash surplus of over Rs10,000 crore by the end of 2010-11, India’s largest private sector iron ore miner Sesa Goa on Wednesday said it does not have the appetite for more acquisitions in the near term as it would be starved for capital after the open offer for 20% stake in Cairn India.
Sesa Goa, a subsidiary of Anil Agarwal-led Vedanta Group which is in the process of acquiring Cairn India, bought a 10.4% stake in the firm by buying out Petronas International Corporation’s shares last week. The acquisition that cost the firm Rs6,620 crore accounted for a substantial portion of its cash in hand.
If its current open offer to the shareholders of Cairn India that closes this month, gets subscribed fully, then Sesa Goa will have a 30.4% stake in the firm. Sesa Goa does not have any exposure in oil and gas yet.
“After this acquisition, we will not have an appetite for more acqusiitions in the near term,” said PK Mukherjee, managing director, Sesa Goa.
“In fact, we will have to arrange for some funding to buy out the Petronas stake. For us this is a cost effective acquisition, where we are utilising our cash by riding the horse of a majority shareholder (Vedanta Group),” he said. The firm reported a 58% jump in sales at Rs9,146 crore in financial year 2011 with a corresponding 60% rise in profit.