Vedanta Still Targets More Value From Konkola But...

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Message Dim 26 Fév 2012 00:08

Vedanta Still Targets More Value From Konkola But...

Vedanta Still Targets More Value From Konkola But No IPO On Cards

02/25/2012

LONDON -(Dow Jones)- Vedanta Resources PLC (VED.LN) is still seeking to extract more shareholder value from its Zambian Konkola Copper Mines PLC, possibly through an initial public offering, but said Saturday this isn't the reason it decided to keep the unit separate from the proposed merger of its Indian-listed subsidiaries.

Vedanta Saturday announced plans to merge its majority-owned Sterlite Industries (India) Ltd. (500900.BY) and Sesa Goa Ltd. (500295.BY) to create a combined company called Sesa Sterlite in a move that would simplify Vedanta's corporate structure from a holding company with interests in six entities to only two: Sesa Sterlite and Konkola Copper Mines.

Vedanta decided to keep Konkola separate rather than merging it into Sesa Sterlite because Konkola didn't fit within the rationale for the corporate restructuring exercise, Tarun Jain, Vedanta's chief financial officer, told Dow Jones Newswires.

He said that the purpose of the corporate restructuring was "to simplify the group structure by eliminating cross holdings and number two was to take advantage of [operational] synergies" such as combining power and aluminum where the latter is dependent on the former for its energy needs.

"In the case of Konkola, there are no operational linkages with India," he said. "Number two there is no cross holdings there."

He said that Zambia's landlocked location made it prohibitively expensive to ship Konkola's ore to India for smelting and said there were no cross holdings because the remaining 20% in KCM that Vedanta doesn't own is owned by the Zambian government.

When asked whether a KCM IPO was likely this year, Vedanta's chairman Anil Agarwal said, "We have nothing on the cards at this time."

Jain, however did say, "we are continuing to look for value propositions."

-By Alex MacDonald, Dow Jones Newswires; 44 20 7842 9328; alex.macdonald@ dowjones.com

(END) Dow Jones Newswires 02-25-121509ET Copyright (c) 2012 Dow Jones & Company, Inc.

Source : http://www.morningstar.com/advisor/t/52 ... -cards.htm
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cvarvois

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Message Dim 26 Fév 2012 00:12

Egalement :

Vedanta plans £9bn merger
Telegraph By James Quinn

Vedanta plans to merge two of its largest subsidiaries in a near-$14bn (£8.8bn) deal designed to simplify its corporate structure and save at least $200m a year.

The Indian commodities giant, which is listed solely in London and is a member of the FTSE 100 (Euronext: VFTSE.NX - news) , is to lead the merger of Sterlite Industries and Sesa Goa (BSE: SESAGOA.BO - news) to form what will become the world's seventh largest diversified mining company.

The rationale behind the move first mooted in 2008 but dropped as a result of the global financial crisis is to bring together a series of complex cross-holdings, simplify the structure and create an Indian national mining champion which will be named Sesa Sterlite.

Sesa Sterlite will have a diverse asset base, with interests in resources including iron ore, oil and gas, zinc, aluminium, silver and copper. Based on 2011 figures, revenues will total $14.2bn with adjusted earnings of $5.3bn.

It is expected the newly formed company will benefit from an industry re-rating as the result of the synergies within the new structure. One source suggested that the combined Sesa Sterlite could be worth as much as $20bn.

The transaction is possible because Vedanta, which is controlled by the Agarwal family who own 63pc of the shares, currently owns a series of majority stakes in a host of entities, including 54.6pc in Sterlite and 55.1pc in Sesa Goa.

As part of the deal, Vedanta is merging its 58.9pc investment in Cairn India in to Sesa Sterlite.

The company's current structural chart is a complicated one, with investor companies owning stakes in other investor companies in addition to the stakes controlled by Vedanta itself. In addition, both Sterlite and Sesa are listed in India, and have a diverse mix of other shareholders.

But as a result of the transaction, Vedanta will have just two investments, a 58.3pc holding in Sesa Sterlite which will be primarily listed in India with secondary American Depositary Receipts listed in New York (Frankfurt: A0DKRK - news) and a 79.4pc holding in Konkola Copper Mines.

Konkola has not been included as part of the deal because there are no cross-investments between it and those entities being merged into Sesa Sterlite. Vedanta tried to float Konkola in 2010, but the listing was pulled. However industry experts suggest a separate listing could still be on the cards, possibly as early as 2013.

Institutional shareholders are understood to have been informed in the past few days of the transaction being led by bankers at JP Morgan Cazenove and Morgan Stanley (EUREX: DWDF.EX - news) with general support understood to have been expressed.

The deal is dependant on approval from shareholders in both Sesa and Sterlite, as well as Vedanta, due to the transfer of Cairn which is viewed as "Class 1" transaction under UK Listing Authority rules.

Subject to regulatory authority, the merger and associated transactions should be complete by the end of this year.

Source : http://uk.finance.yahoo.com/news/vedant ... 02276.html

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