Mumbai: Sterlite Industries, the flagship company of Vedanta Group, on 5 June commenced an American Depository Shares (ADS) issue to raise around $2 billion for funding expansion plans and buyouts.
The company will offer 125 million shares with a greenshoe option of 18.75 million shares.
The issue price will be determined on basis of the company’s share price in India, which closed at $13.65 on 1 June. At this price, the company would be able to mop-up around $1.96 billion (Rs8,000 crore).
In a filing to the Securities and Exchanges Commission, US, the company said the ADS price would not be more than 5% or less than 10% of its India price.
Post offer, the shares will represent about 18.3% interest in Sterlite and the company has applied to get the ADS listed on the New York Stock Exchange under the symbol “SLT”, Sterlite Industries (India) Ltd (SIIL) said in a communique to the Bombay Stock Exchange (BSE).
In May, Sterlite Industries announced plans to raise $2 billion through ADS issue for acquisitions, increasing stake in subsidiaries and setting up a thermal coal-based power facility in Orissa for around Rs8,730.5 crore.
The company is also planning to acquire the remaining 29.5% ownership interest of government in Hindustan Zinc Ltd, which would amount to around Rs9,230 crore through the proceeds of this offering.
The ADS proceeds may also be used for reducing debt of Rs689.3 crore ($150 million).
After this offering, the company is expected to have nearly 683 million outstanding equity shares, with the Anil Agarwal-promoted Vedanta Resources Plc owning about 62.8% of those shares, Sterlite said.
The underwriters and joint global coordinators and bookrunners for the ADS offering are Merrill Lynch, Pierce, Fenner and Smith Incorporated, Morgan Stanley and Co International Ltd and Citigroup Global Markets Inc.
Nomura Singapore is the underwriter for public offering without listing in Japan. Sterlite expects to allocate 11.5 million equity shares in the form of ADS in that country.