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Sesa Goa and Sterlite Industries merger becomes effective

KOLKATA: The Vedanta group's proposedmerger of its subsidiaries Sesa GoaBSE 1.84 % Limited and Sterlite IndustriesBSE 3.10 % (India) Limited to create 'Sesa Sterlite' has become effective. The consolidation will create world's seventh largest global diversified natural resources major by earnings before interest, taxes depreciation and amortisation (EBITDA). 

Mr Anil Agarwal, Mr Navin Agarwal and Mr M S Mehta have been appointed as chairman, executive Vice Chairman and Chief Executive Officer, respectively, for Sesa Sterlite. 

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, 2013, a statement issued by the Vedanta Group on Sunday said. 

The merged entity will have increased diversification which is expected to reduce volatility of earnings through commodity cycles, lowering the cost of capital and enhancing value. 

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 world class asset base will benefit from the previously announced capex programme that has largely been invested. 

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 crores ($13.2 billion) and EBITDA of Rs 25,232 crores ($4.6 billion) with a strong balance sheet having cash and liquid 
investments of Rs 42,060 crores ($7.7 billion) and net debt/EBITDA of 1.4 times," the official statement added.