Sesa Goa and Sterlite Industries (India) have received shareholders' nod for a
proposed merger of the companies.
In a filing to the Bombay Stock Exchange (BSE), Sesa Goa said its shareholders, in a meeting in Goa on June 19, favoured the merger resolution. The shareholders present account for 91.70 per cent of voters or 79.12 per cent of votes in value.
The scheme has been
approved by the equity shareholders with requisite majority and now awaits the approval of the Bombay High Court.
The shareholders of Sterlite Industries also approved the merger proposal by a majority of 92 per cent of votes in value at a meeting held on June 21 in Tuticorin. The merger is now subject to the approval of the Madras High Court, Sterlite Industries said in a separate filing to BSE.
Shares of Sesa Goa were trading 0.67 per cent up at Rs 187.15 on BSE, while
Sterlite Industries rose 0.45 per cent to Rs 100.10 on BSE.
The merger proposal covers Sesa Goa, Sterlite Industries, Madras Aluminium Co Ltd, Sterlite Energy and Vedanta Aluminium.
London Stock Exchange-listed
Vedanta Resources had in February announced its plan to
restructure its operations.
It was planned that all its subsidiaries, except Konkola Copper Mines, will be merged into Sesa Goa and post-restructuring, a new entity, Sesa Sterlite, would be carved out.
The restructuring will lead to Vedanta's debt burden falling by about 61 per cent to $3.8 billion. Besides, its debt service liability will come down to $180 million from current levels of $500 million.
However, Sesa Sterlite would end up with a total debt of about $14 billion.
The merger would create seventh largest natural resources company of the world (in terms of EBITDA) and a cost saving of Rs 1,000 crore annually, Vedanta had said earlier.
Post merger, Vedanta will hold 58.3 per cent stake in Sesa Sterlite. According to the scheme of arrangements, Sterlite shareholders will get three shares of Sesa Goa for every five shares held according to the swap ratio.
This is second restructuring exercise being attempted by Vedanta Resources as its first attempt in 2008 had failed due to objections raised by some minority shareholders over the valuation of a group firm, Konkola Copper Mines.
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.
With PTI inputs
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