Vedanta Still Targets More Value From Konkola But...
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