NEW DELHI: A day after Vedanta Groupfirms Sesa Goa and Sterlite IndustriesBSE 2.64 % merged to create Sesa Sterlite, the company today said the group'sChairman 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 today.
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.
Increased diversification is expected to reduce volatility of earnings through commodity cycles, lowering the cost of capital and enhancing value, it said.
Sesa Sterlite will have exposure to zinc-lead-silver, iron ore, oil & gas, copper, aluminium and commercial power, with assets located in India, Australia, Liberia, South Africa, Namibia, Ireland and Sri Lanka.
This asset base will benefit from the previously announced capex programme that has largely been invested.
The company said the consolidation will result in significant operational, capital and corporate synergies and will be earnings accretive to all shareholders.
"In the financial year ended March 31, 2013, on a consolidated basis, Sesa Sterlite would have generated revenue of Rs 71,780 crore ($ 13.2 billion) and EBITDA of Rs 25,232 crore ($ 4.6 billion) with a strong balance sheet having cash and liquid investments of Rs 42,060 crore ($ 7.7 billion) and net debt/EBITDA of 1.4 times," it said.
The group firms Sesa Goa and Sterlite Industries had yesterday announced that their merger scheme, together with several other group firms, has now become effective, a development which came within a week of a final approval for merger from the Goa bench of Bombay High Court.
The company said the record date "for determining the shareholders to whom the equity shares of Sesa Goa will be allotted as per terms of the scheme" has been fixed as August 28.
The 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 August 28 has been fixed as the record date for allotting shares to the respective shareholders as per the merger scheme.
The merger, first announced on February 25, 2012, is aimed at creating a mega Indian natural resources giant, Sesa Sterlite, on the likes of BHP Billiton and Rio Tinto. It would also result in a Rs 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.
The decks for completing the merger were cleared on August 12, 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 which challenged an earlier approval granted by a single bench.
All other regulatory clearances, approving the merger, were secured by the twoVedanta group firms last year itself.
As per the merger scheme, now Sesa Sterlite will be the holding company of all group firms of Vedanta other than Konkola Copper Mines (KCM) in Zambia. Vedanta will hold 58.3 per cent in Sesa Sterlite and 79.4 per cent stake in KCM.
On the record date (August 28), 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 Rs 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 (Rs 1,95,000 crore), net income of $ 1.9 billion (Rs 10,000 crore) and cash and liquid investments of $ 7.7 billion (Rs 42,000 crore) as on March, 2013.
It will also inherit almost 87 per cent 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.