Shareholders okay Sesa Goa, Sterlite merger plan

R.Y. NARAYANAN, THE HINDU BUSINESS LINE
COIMBATORE, JUNE 25:
The mega merger of Sesa Goa Ltd and Sterlite Industries (India) Ltd that would create a global natural mineral resources powerhouse has crossed the first hurdle.

The shareholders of both the companies have approved the merger proposal at separate meetings held for the purpose.

The proposal covers Sesa Goa, Sterlite Industries, Madras Aluminium Co Ltd, Sterlite Energy Ltd and Vedanta Aluminium Ltd.

In a communication to the stock exchanges, Sesa Goa said that at a meeting of its shareholders held on June 19 at Goa, 91.70 of voters in number representing 79.12 per cent of votes in value, voted in favour of the merger resolution.

The scheme has been approved by the equity shareholders and would now await the approval of the High Court of Bombay at Goa, Sesa Goa said.

The shareholders of Sterlite Industries also approved the merger proposal by an overwhelming majority of 92 per cent of the votes in value at a meeting held on June 21 in Tuticorin and the merger proposal would be subject to the approval of the High Court of Madras, Sterlite Industries said.

The proposal envisaged the merger of Sterlite Industries with Sesa Goa (proposed new name "Sesa Sterlite"). Under the merger plan, three Sesa Goa shares were to be allotted for every five Sterlite shares.

Vedanta Aluminium Ltd and Madras Aluminium Company Ltd (Malco) were to be wholly consolidated into Sesa Sterlite. Vedanta's direct holding of 38.8 per cent in Cairn India Ltd were to be transferred to Sesa Goa, together with the associated debt of $5.9 billion, at cost.

After the transfer, Sesa Sterlite will have a 58.9 per cent shareholding in Cairn India. Post merger, Sesa Sterlite would become a global diversified natural resources powerhouse, expected to be the seventh largest by EBITDA.

The approval did not create any impact on the stock price as it was probably expected by the market despite some reservations about the merger impact on the Sesa Goa shareholders.

SGL was trading at Rs 187.90, a gain of Rs 2, on the BSE with a trading volume of 1.19 lakh shares. Sterlite remained virtually unmoved, trading at Rs 100.45, a gain of 80 paise, with a trading volume of 5.16 lakh shares.