Nod for Sesa Goa, Sterlite merger | india | Hindustan Times
Today in New Delhi, India
Mar 25, 2017-Saturday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Nod for Sesa Goa, Sterlite merger

india Updated: Jun 26, 2012 00:43 IST
HT

In what would pave the way to the formation of one of the world’s largest natural resources company, shareholders of iron ore firm Sesa Goa has approved the merger of the company with group firm Sterlite Industries betraying market expectations of some opposition. ss. While 91.7% of the Sesa Goa shareholders present at last week’s meeting in Goa voted for the merger, 92% of Sterlite Industries’ shareholders approved the deal. The latter had voted on June 21 in Tuticorin, Vedanta said in a release. After the merger, Anil Agarwal-led Vedanta Resources will hold 58.3% stake in Sesa-Sterlite. As per the arrangement, Sterlite shareholders will get three shares of Sesa Goa for every five shares held according to the swap ratio. Cairn India, Hindustan Zinc, Balco, Vedanta Aluminium, Madras Aluminium, Talwandi Sabo Power and Australian Copper Mines will become subsidiaries of Sesa Sterlite after the restructuring. Only Konkola copper mines of Zambia would stay out of the restructuring. The merger will lead to Vedanta’s debt burden falling by about 61% to $3.8 billion (Rs 21,850 crore). Its debt service liability will also come down to $180 million (Rs 1,035 crore) from the current $500 million (Rs 2,875 crore). Its total cumulative debt would still be a staggering $14 billion (Rs 80,500 crore). The company had first announced its plans to restructure its operations in February. It would result in a cost saving of Rs 1,000 crore annually, it had said. This is second restructuring exercise being attempted by the Vedanta which has yielded results, as its first attempt in 2008 had failed due to objections raised by some minority shareholders over valuation of a group firm, Konkola Copper Mines. Shares of Sesa Goa reacted to this news and were up 0.8% to Rs 187.35 while shares of Sterlite was down 0.5% to Rs 99.15.

tags