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| Vedanta to up its stake in Sesa Goa to 55% |
| Press Trust of India / New Delhi Jun 12, 2009, 15:38 IST |
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Vedanta Resources, promoted by metal czar Anil Agarwal, today said it will subscribe to the preferential share offer being made by Sesa Goa to hike its stake in the group iron ore company to 55 per cent with a cash outgo of $120 million (Rs 569.79 crore).
At present, Vedanta Resources' shareholding in Sesa Goa is 53.1 per cent.
The proposed increase in stake comes a day after Vedanta Group firm Sesa Goa announced acquisition of V S Dempo & Company's mining assets in an all-cash deal of Rs 1,750 crore.
Under the preferential share offer, Vedanta Resources will subscribe to an additional 33,274,000 equity shares of Re 1 face value each, a company statement said.
The proposed transaction is subject to the approval of Sesa Goa's shareholders and is expected to be completed by July, it added.
In one of the biggest acquisitions in the iron ore sector in recent past, the country's largest private sector iron ore exporter Sesa Goa signed a definitive share purchase agreement with Goa-based V S Dempo & Company yesterday to buy its mining assets.
The acquisition will be funded by the existing cash resources of Sesa Goa, which as on March 31, 2009, stood at Rs 4,143 crore.
Post-acquisition, Sesa Goa will have the ownership right of Dempo Group's mining assets and related infrastructure like processing plants, barges, jetties, transhippers and loading capacities at Mormugoa port.
V S Dempo & Company has 19 mining leases spanned across 1,800 hectares in states of Maharashtra, Jharkhand and Goa. It also has memoranda of understanding with governments of Jharkhand and Maharashtra for processing low grade iron ore into valuable concentrates.
Dempo's products mix include iron ore, calibrated ore lumps and low magnetite concentrate. In the year ended March 31, 2009, it produced 3.94 million tonnes of iron ore.
The company's revenue in the last fiscal stood at Rs 976 crore.
As part of its expansion plan in India, Vedanta Resources plans to pump in Rs 70,000 crore by 2011-12 for its aluminium, zinc, iron ore and copper projects. Of the proposed investment, it has already invested about 50 per cent.
"We intend to invest Rs 50,000 crore in aluminium sector and Rs 20,000 crore in other areas like copper, iron ore and zinc by 2011-12 in India," Vedanta Resources Chairman Anil Agarwal had told PTI earlier this year.
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