Vedanta Resources said it would merge Sterlite Industries with sister concern Sesa Goa to create 'Sesa Sterlite'.
There were debt concerns as the newly-formed entity 'Sesa Sterlite' will have debt which would be about 14 times the current debt of Sesa Goa.
The boards of the two companies have approved the issue of three shares of Sesa Goa for every five shares held in Sterlite.
According to the deal, Vedanta Aluminium along with the Madras Aluminium Company will also be consolidated into Sesa Sterlite. 'Vedanta will also transfer its 38.8% holding in Cairn India to Sesa Sterlite. The parent company's debt which will thus be lowered by 61% and Sesa Sterlite will take on debt of $5.9 billion,' according to media report.
As on September 2011, Sesa Goa's consolidated debt stood at Rs4,371.5 crore, which is 0.3 times its shareholders equity. Sterlite Industries debt stood at Rs14,942.8 crore. As a result of the merger, the debt of the combined entity would be approximately Rs68,000 crore.
This number includes the debt of Cairn India, Sterlite Industries and Sesa Goa as well as Vedanta Aluminium's Rs19,600-crore liabilities.
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There were debt concerns as the newly-formed entity 'Sesa Sterlite' will have debt which would be about 14 times the current debt of Sesa Goa.
The boards of the two companies have approved the issue of three shares of Sesa Goa for every five shares held in Sterlite.
According to the deal, Vedanta Aluminium along with the Madras Aluminium Company will also be consolidated into Sesa Sterlite. 'Vedanta will also transfer its 38.8% holding in Cairn India to Sesa Sterlite. The parent company's debt which will thus be lowered by 61% and Sesa Sterlite will take on debt of $5.9 billion,' according to media report.
As on September 2011, Sesa Goa's consolidated debt stood at Rs4,371.5 crore, which is 0.3 times its shareholders equity. Sterlite Industries debt stood at Rs14,942.8 crore. As a result of the merger, the debt of the combined entity would be approximately Rs68,000 crore.
This number includes the debt of Cairn India, Sterlite Industries and Sesa Goa as well as Vedanta Aluminium's Rs19,600-crore liabilities.
....more info