Vedanta resources plc
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Vedanta Resources plc
Vedanta Resources Plc is a global diversified metals and mining company
It is headquartered in London, United Kingdom.
Companys assets and operations are located in the high growth markets of India, Zambia, Namibia, South Africa, Liberia, Ireland and Australia
Company is primarily engaged in copper, zinc, silver, aluminium, iron ore and power business.
It is the largest mining and non-ferrous metals company in India
History
The company was founded by Anil Agarwal in Mumbai in 1976.
It was first listed on the London Stock Exchange in 2003 when it raised $876 million through an Initial Public Offering.
Meanwhile in 2006 it acquired Sterlite Gold, a gold mining business.
It raised an additional $2bn through an ADR issue in 2007.
In 2008 it bought certain of the assets of Asarco, a copper mining business for $2.6bn.
In December 2011 it also completed the US$8.67 billion acquisition of Cairn's Indian unit heralding its foray in the oil sector.
Operations
Copper
Sterlite Industries (India) Ltd.: Sterlite is registered office headquartered in Tuticorin, India.
Sterlite has been a public listed company in India since 1988, and its equity shares are listed and traded on the NSE and the BSE, and are also listed and traded on the NYSE in the form of ADRs.
Vedanta owns 53.9% of Sterlite and have management control of the company.
Konkola Copper Mines: Vedanta own 79.4% of KCMs share capital and have management control of the company.
KCMs other shareholder is ZCCM Investment Holdings Plc.
The Government of Zambia has a controlling stake in ZCCM Investment Holdings Plc.
Copper Mines of Tasmania Pty Ltd.: CMT is headquartered in Queenstown, Tasmania. Sterlite owns 100.0% of CMT and has management control of the company.
Zinc
Hindustan Zinc Limited: HZL is headquartered in Udaipur in the State of Rajasthan.
HZLs equity shares are listed and traded on the NSE and BSE.
Sterlite owns 64.9% of the share capital in HZL and has management control.
Sterlite has a call option to acquire the Government of Indias remaining ownership interest.
Aluminium
Bharat Aluminium Company Ltd.: BALCO is headquartered at Korba in the State of Chhattisgarh.
Sterlite owns 51.0% of the share capital of BALCO and has management control of the company.
The Government of India owns the remaining 49.0%.
Sterlite exercised an option to acquire the Government of Indias remaining ownership interest in BALCO in March 2004.
Vedanta Aluminium Ltd.: Vedanta Aluminium is headquartered in Jharsuguda, State of Orissa.
Vedanta owns 70.5% of the share capital of Vedanta Aluminium and Sterlite owns the remaining 29.5% share capital of Vedanta Aluminium.
Vedanta Aluminium produces ingots, billets & wire rods that are sold in the markets around the World.
Madras Aluminium Company Ltd.: MALCO is headquartered in Mettur, India.
MALCOs equity shares are listed and traded on the NSE and BSE.
They own 93.9% of MALCOs share capital and have management control of the company.
Iron ore
Sesa Goa Limited: Sesa Goa is headquartered in Panaji, India, and its equity shares are listed and traded on the NSE and BSE.
Vedanta owns 57.1% of Sesa and have management control of the company.
Commercial power generation business
Sterlite Energy Limited: Sterlite Energy is headquartered in Mumbai.
Sterlite owns 100.0% of Sterlite Energy and has management control of the company.
Dividend History
Recent Events
Company is planning to merge Sterlite Industries into Sesa Goa to form a new entity Sesa Sterlite
Sterlite Industires will be absorbed by Sesa Goa for a swap ratio of 3:5 i.e. 3 shares of Sesa Goa for every 5 shares held in Sterlite industry
The new holding firm will own controlling stake in all of Vedantas companies in India
It will create 7th largest resources major globally
The merger brings together all Indian and some overseas assets into single entity
Valuation for the merger is done by KPMG and Grand Thornton
Merger will bring synergy of Rs 1000 crore annually through reduction of cross shareholding, simplification of structure and tax gains
Parent Vedantas debt will shrink by almost 61% to $3.8 billion and debt service liability will be reduced by $300 million for year ending March 31, 2013
The biggest concern for investors is the consolidated debt of about Rs.68600 crore which would prove to be the burden for the new entity, while Vedanta Resources will be the runaway beneficiary
The merger will bring in recently acquired Cairn India and also loss making subsidiary Vedanta Aluminum and Madras Aluminum.
The transfer of the entire shareholding of 58.9% of Cairn India into SesaSterlite wil also carry associated debt of $5.9 billion on the books of new entity
This merger ratio appears to be slightly in favour of Sterlite shareholders and detrimental to Sesa Goa shareholders. It will benefit Vedanta resources as the hoding company can pass on Vedanta Aluminum onto Sesa Sterlite
-Jagannadham Thunuguntla SMC Global strategist
This is one of the reasons that the institutional shareholders in Sesa Goa have opposed the merger plan
Source:
www.vedantaresources.com
www.en.wikipedia.org
Economic Times
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