Financial Daily from THE HINDU group of publications
Friday, Dec 19, 2003
Financial Daily from THE HINDU group of publications Friday, Dec 19, 2003 |
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Rights Issues Markets - Rights Issues Sterlite plans rights issue Our Bureau
Mumbai , Dec. 18 STERLITE Industries (India) Ltd plans to issue equity shares to its existing shareholders on a rights basis. The board of directors would meet on December 24 to consider the issue, the company informed the stock exchanges on Thursday. The announcement has evoked interest in market circles as it follows the recent IPO of Vedanta Resources, the holding company of Sterlite, which raised $1 billion from investors in the UK and the US. It has been listed on the London Stock Exchange. Vedanta holds 55 per cent of the Sterlite's equity through a wholly-owned subsidiary Twinstar Holdings. "The rights issue is being planned to enable Vedanta to bring in part of the money raised by it through its recent issue," said a company official. The money was essentially raised to finance the Sterlite group's expansion plans and a rights issue could be a best way to bring the funds into the company, the official said. It had recently announced expansion plans of group companies Balco and Hindustan Zinc. The proposed issue of equity also assumes significance as the company had at one stage announced a buy back of shares that would have eventually led to its delisting had it been fully subscribed. Even now, a section of the market thinks that the rights issue would be priced at a significantly higher level to discourage minority shareholders from taking part. Sterlite shares rose to Rs 1,280.75 on the BSE on Thursday from Rs 1,256.75 on Wednesday. The group's expansions include expanding the capacity of the Tuticorin copper smelter from 1.8 lakh tonnes per annum (tpa) to 3 lakh tpa of copper anode and commissioning of a 1.27-lakh tpa copper refinery in Tuticorin. In the aluminium segment, the company plans to invest in two greenfield projects — a 2.5-lakh tpa aluminium smelter at the Korba complex and a one-million tpa alumina refinery in Orissa. The refinery is expected to enable the group to supply alumina to the new smelter at Korba, as also to access the export markets. In the zinc segment, the company's principal expansion plans for Hindustan Zinc include expanding the capacity of its Rampura Agucha mine from 2 million tpa to 3.3 million tpa, Rajpura Dariba and Zawar mines to 1 million tpa and 1.25 million tpa, respectively, and construction of a new zinc smelter at Chanderiya to increase the production capacity by 1.7 lakh tonnes.
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