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The Competition Commission of India has approved the amalgamation of various Vedanta Group companies in India to consolidate the structure of the firm and also to eliminate cross holding. The amalgamation of Sterlite Industries India Ltd, Madras Aluminium Company, along with its subsidiaries into Sesa Goa Ltd, has got a green signal from the competition watchdog.
The main products of the companies involved in the proposed combination are alumina, primary aluminium, flat-rolled aluminium products and commercial power generation.
The competition watchdog said that the proposed combination is a measure of internal restructuring of the London-listed Vedanta Group companies, and that Vedanta Resources Plc would continue to hold the ultimate management control over activities of the companies involved in the proposed combination. It is not likely to result in any adverse competition concern in India, CCI said.
Holding company
As per the restructuring exercise, Sesa Sterlite will become a holding company of all of Vedanta's group firms, except Konkola Copper Mines. This includes Cairn India, Hindustan Zinc, Balco, Vedanta Aluminium, Madras Aluminium, Talwandi Sabo Power and Australian Copper Mines becoming subsidiaries of Sesa Sterlite.
Post merger, Vedanta Resources will hold a 58.3 per cent stake in Sesa Sterlite. For the merger, Sterlite shareholders will get three shares of Sesa Goa for every five shares held, as per the swap ratio fixed. Eventually, they will become shareholders of Sesa Sterlite that will be listed on the bourses, after receiving necessary regulatory approvals.
At the same time, Vedanta will also pass on most of its debt burden to Sesa Sterlite, that includes $5.9-billion debt taken for acquiring Cairn India last year.
The India scheme was approved by the board of directors of Sterlite Industries India, MALCO and SGL. The Ekaterina Scheme was approved by the board of directors of Ekaterina and SGL in February earlier this year.”
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