Vedanta looking to merge Sterlite & Sesa Goa:

<<

bingogo

Avatar de l’utilisateur

Administrateur du site

Messages: 4379

Inscription: Jeu 30 Juil 2009 16:48

Localisation: la seyne sur mer

Message Mar 21 Fév 2012 18:21

Vedanta looking to merge Sterlite & Sesa Goa:

Published on Tue, Feb 21, 2012 at 17:05 | Source : CNBC-TV18

Sources indicate that the restructuring process in Vedanta is being finalised. The Vedanta Group may be looking to merge Sterlite with Sesa Goa . Cairn India too may be impacted by the restructuring, reports CNBC-TV18's Gautam Broker.

Sterlite and Sesa Goa merge with each other. Sterlite remains the parent company. Vedanta Resources Plc has 38.8% in Cairn. That gets transferred into Sterlite. So, Sterlite becomes the holding company for the Indian operations. It will have indirectly about 58.8% in Cairn India. It gets the iron ore operations of Sesa Goa and has its own Indian operations. That is the big exercise that has been undertaken at this point.

Announcement is likely very soon. The announcement will happen on a day when the London listed entity and the ADRs as well as the Indian listed subsidiaries are not trading. So, it could likely be on a weekend. That is the basic news flow.

This has been done keeping Vedanta Resources Plc debt in mind, particularly after the Cairn debt. To service the debt, Vedanta Resources Plc needs cash up streaming from the subsidiaries. So, you would have higher dividend payouts from subsidiaries all through this year so that Vedanta Resources can meet the fund USD 550 million requirement to service the interest.

Aside of that, the bigger concern with it is the principal debt itself, over USD 9 billion in pro forma debt. Now, to tackle that or to navigate that, they are basically trying to prevent the concerns on the debt covenant breach. The calculation on the street is that a 15% fall in commodity prices from current levels could trigger these debt covenants. If it does happen, that will be a big de-rating.

Moody's has already downgraded Vendanta's bonds to Ba3 from Ba2 last month and that was after the Cairn acquisition. Moody's also noted that Vedanta has made sporadic attempts to try and reduce the debt concerns, but nothing major has happened. So, this will be the major move which will try and elevate the debt concerns.

The other thing is that Vedanta has been pointing out recently that it is in talks with government to buy out Balco . For that, it will need USD 3 billion. Also, it has its own huge capex programmes. So, that additionally add to the debt burden and gross debt could rise to as high as USD 17-18 billion. That will definitely be unsustainable.

When you do the restructuring and try and simply the group structure, which is very complex at the moment, you try and address some of the concerns the street has. And then once these are addressed, you can pick up more money from the street without having your debt profile being downgraded. That is what is in the mind of Vedanta.

You could expect announcement soon, but the bigger news is that Sterlite and Sesa Goa are going to be merged. From what CNBC-TV18 hears is the merger ratio is likely to be favourable for Sterlite because it is the parent and it holds the cash rich subsidiary- Balco. Once the government's stake is bought out, it will be the holding company for all the Indian operations put together.

Meanwhile, responding to this speculation, Vedanta said that they will continue to work towards simplifying the group structure and investors will be informed at an appropriate time.
<<

bingogo

Avatar de l’utilisateur

Administrateur du site

Messages: 4379

Inscription: Jeu 30 Juil 2009 16:48

Localisation: la seyne sur mer

Message Mar 21 Fév 2012 18:28

Re: Vedanta looking to merge Sterlite & Sesa Goa:

BRIEF-Vedanta says strategy is to simplify corporate structure
Tue, 21st Feb 2012 13:59


LONDON, Feb 21 (Reuters) - Vedanta Resources PLC:

* Notes media speculation regarding group structure

* Stated strategy is to simplify and consolidate its corporate structure

* Management reviews this strategy on an ongoing basis and will update the market as appropriate
<<

bingogo

Avatar de l’utilisateur

Administrateur du site

Messages: 4379

Inscription: Jeu 30 Juil 2009 16:48

Localisation: la seyne sur mer

Message Sam 25 Fév 2012 10:17

Vedanta to merge India units and list in New York

Published: Saturday, 25 Feb 2012 | 2:54 AM ET




MUMBAI, India - Vedanta Resources says it will merge its Indian subsidiaries to cut costs and list shares in New York.

Vedanta says the merger of Indian mining majors Sterlite Industries and Sesa Goa will save $200 million a year. The group's holdings in Cairn India will also be consolidated in the new entity, which will hold a 58.3 percent stake in the oil and gas producer.

The new company, Sesa Sterlite, will be the 7th largest natural resources company in the world by earnings.

Retourner vers About Konkola KCM - Vedanta

Powered by phpBB - Designed by Vjacheslav Trushkin for Free Forums/DivisionCore - Traduction par: phpBB-fr.com