Sesa seeks shareholders' nod to up borrowing cap to Rs 80k-cr

Metal major Sesa Sterlite today sought shareholders' nod to enhance its borrowing limit to Rs 80,000 crore for funding needs in group firms and buying out government's residual stake in Hindustan Zinc and Balco.
The Anil Agarwal-led firm's Board has, in the last week, already passed an enabling resolution to increase the limit by 33.3 per cent from Rs 60,000 crore.
Elaborating the rationale, it said in a BSE filing, the enhancement of limit was aimed at meeting funds requirements of all the group divisions such as iron ore, iron making, copper, aluminium production and commercial power generation.
The need is also there for meeting fund requirements to repay existing debt and for proposed capital expenditure of the group including subsidiary, associate firms and its "buy out of the balance stake of HZL and Balco and for general corporate purposes..." it said.

"...The company may require to borrow from time to time by way of loans and/or issue of bonds, debentures or other securities and the existing approved limit may likely to be exhausted in near future and it is, therefore, recommended to enhance the borrowing limits of the company up to Rs 80,000 crore," Sesa Sterlite said.
The company seeks shareholders' nod to raise the fund in both domestic and foreign currencies. As funding need would depend on various factors, it is considered expedient by the Board to obtain shareholders' consents, it said.

Last January, shareholders passed a special resolution had authorized the company Board for raising both domestic and foreign currency borrowings up to a limit of Rs 60,000 crore.

The government, which currently holds 29.5 per cent stake in HZL and 49 per cent stake in Balco, is looking at exiting the two firms in which Anil Agarwal-led firm holds majority stake. The government had sold controlling stake in these companies between 2001-2003.
The Budget for the current fiscal estimates Rs 15,000 crore to come from residual stake sale in erstwhile PSUs HZL and Balco.
Shareholders' approval through postal ballot has also been sought for issuing convertible securities of up to Rs 6,000 crore and for private placement of non-convertible debentures of up to Rs 4,000 crore, the company said.

The enabling resolutions, once approved by shareholders, would remain valid for one year from the date of getting their nod.