The shareholders of Sterlite Industries (India) cast votes here today on the proposed merger of the company with group firm Sesa Goa and the result would be known on June 25.

“...the court convened meeting of the equity shareholders of the company was held to consider the scheme of amalgamation and arrangement...The results will be announced on June 25,” Strelite said in a BSE filing.

The merger with Sesa Goa, aimed at simplifying the Vedanta group’s structure and cutting costs, requires approval of 75 per cent or more shareholders to become effective.

Sesa Goa shareholders’ had also cast their votes on the proposed merger earlier this week. Results though would come out only on June 25.

Debt burden

The 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, if approved, 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.

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.

Share swap ratio

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.

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.

(This article was published on June 21, 2012)
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