In a major organisational restructuring, Vedanta Group announced the merger of its subsidiaries into Sesa Goa, which will now be called Sesa Sterlite, creating in the process the world’s seventh largest natural resources company. This was announced by group chairman Anil Agarwal on Saturday.
“We had this on the drawing board when we completed our Cairn India acquisition. The Vedanta Plc shareholders always wanted a simplified structure. They were uncomfortable with separate holding companies,” he said.
The new structure involves merging Sterlite Industries, Vedanta Aluminium and Madras Aluminium into Sesa Goa, with Sterlite shareholders getting three shares of Sesa Goa for every five shares they hold.
Vedanta Resources will hold 58.3% stake in Sesa Sterlite, which in turn will be the holding company for all the other subsidiaries, except for the Konkola Copper Mines in Zambia, Africa, which will be directly held by Vedanta Resources.
By virtue of Vedanta’s 38.8% equity in oil and gas company Cairn India, Sesa Sterlite will own 58.9% shareholding in the oil company. “The combined market capitalisation of the new entity will be $20 billion (R1 lakh crore),” said Tarun Jain, group director (finance), Vedanta.
The entire process is expected to be completed by the end of the current calendar year and the new entity will be listed both in India — on Bombay Stock Exchange and National Stock Exchange — as well as on the New York Stock Exchange.