The decks for completing the merger were cleared on 12 August, when the final regulatory clearance was received after a division bench of the Bombay high court at Goa gave its nod for the same and rejected a review petition that challenged an earlier approval granted by a single bench. Photo: Bloomberg (Bloomberg)
The decks for completing the merger were cleared on 12 August, when the final regulatory clearance was received after a division bench of the Bombay high court at Goa gave its nod for the same and rejected a review petition that challenged an earlier approval granted by a single bench. Photo: Bloomberg
(Bloomberg)

Anil Agarwal to be chairman of Sesa Sterlite

Vedanta said the group consolidation and simplification has received all the necessary approvals

New Delhi: A day after Vedanta Group firms Sesa Goa and Sterlite Industries merged to create Sesa Sterlite, the company on Sunday said the group’s chairman Anil Agarwal will head the new entity.

“Anil Agarwal, Navin Agarwal and M.S. Mehta have been appointed as chairman, executive vice-chairman and chief executive officer, respectively, for Sesa Sterlite," Vedanta said in a statement on Sunday.

The statement said the group consolidation and simplification has received all the necessary approvals and thereby the merger of its subsidiaries Sesa Goa and Sterlite Industries has become effective, to create Sesa Sterlite.

“The consolidation will create world’s seventh largest global diversified natural resources major...ranked by Ebitda for the 12 months ended December 2012 from public filings and pro-forma Ebitda for the 12 months ended March 2013 for Sesa Sterlite, with a world-class, low cost asset base in close proximity to high growth markets," it added.

Within a week after receiving final approval from the Goa bench of Bombay high court, Vedanta group firms, Sesa Goa and Sterlite Industries on Saturday announced that their merger scheme, together with several other group firms, has now become effective.

In a joint statement, both the companies said that merger of Sterlite and Malco into Sesa Goa has become effective pursuant to the scheme of amalgamation and arrangement amongst Sterlite, Malco, Sterlite Energy, Vedanta Aluminium and Sesa Goa and their shareholders and creditors. Accordingly, Malco’s power plant has been transferred to Vedanta Aluminium, it further said, adding that 28 August has been fixed as the record date for allotting shares to the respective shareholders as per the merger scheme.

The merger, first announced on 25 February 2012, is aimed at creating a mega Indian natural resources firm, Sesa Sterlite, on the likes of BHP Billiton and Rio Tinto. It would also result in a 1,000 crore annual saving for Vedanta through a reduction in debt-servicing cost as most of its debt gets transferred to the new entity.

“Yesterday, we filed the necessary documents to Registrar of Companies (related to merger scheme). With that, the merger has become effective and it means Sterlite Industries no longer exists," Sesa Goa’s managing director P.K. Mukherjee said.

The decks for completing the merger were cleared on 12 August, when the final regulatory clearance was received after a division bench of the Bombay high court at Goa gave its nod for the same and rejected a review petition that challenged an earlier approval granted by a single bench. All other regulatory clearances, approving the merger, were secured by the two Vedanta group firms last year itself.

As per the merger scheme, Sesa Sterlite will be the holding company of all group firms of Vedanta other than Konkola Copper Mines (KCM) in Zambia. Vedanta will hold a 58.3% in Sesa Sterlite and 79.4% stake in KCM. On the record date (28 August), Sterlite shareholders will get three shares of Sesa Goa for every five shares held, according to the swap ratio. Malco shareholders will get 7 shares of Sesa Goa for their every 10 share of 2 each. Cairn India, Hindustan Zinc, Balco, Vedanta Aluminium, Madras Aluminium, Western Clusters in Liberia, Talwandi Sabo Power and Australian Copper Mines have now become subsidiaries of Sesa Sterlite after the restructuring.

The new company has total assets worth $36 billion, net income of $1.9 billion and cash and liquid investments of $7.7 billion as on March 2013. It will also inherit almost 87% of Vedanta’s debt, which was $16.593 billion in March 2013, as loans taken to fund the Cairn India acquisition get transferred to Sesa Sterlite. Accordingly, Sesa Sterlite has a debt of $14.399 billion. PTI

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