Sterlite Parent Twinstar Holdings To List On LSE

Mumbai, Nov 5: | Updated: Nov 6 2003, 05:30am hrs
The Anil Agarwal-controlled Mauritius-based Twinstar Holdings Ltd the parent company of Sterlite Industries India Ltd (SIIL) is planning to get listed on the London Stock Exchange (LSE). The move is aimed at unlocking the value of Twinstars holdings in SIIL and to pump in further equity into the company in order to fund SIILs ambitious expansion plans.

The promoters expect to rake in $400 million to $500 million from the proceeds of the listing, said sources close to the company.

According to these sources, Sterlite has employed two heavyweight investment bankers, HSBC and JP Morgan, to arrange its London listing.

Foreign promoter Twinstar holds 55.13 per cent equity in SIIL, which in turn controls Bharat Aluminium Company Ltd (Balco) and Hindustan Zinc Ltd (HZL). The Indian promoter Madras Aluminium Company Ltd (Malco) currently holds 7.13 per cent in SIIL, while persons acting in concert hold 5.76 per cent.

According to sources, post-listing, there will be no change in the public holding of SIIL Ltd. The listing of Twinstar will also allow Twinstar to further increase its equity in SIIL.

Twinstar has forwarded an application to the Foreign Investment Promotion Board (FIPB) for approval for increasing its holding in SIIL from the existing 55.13 per cent to up to 75 per cent over a period of time. The shares are proposed to be purchased from the secondary market and/or acquisition from the co-promoters. The acquisition of shares will be at the ruling price and will be as per the Securities and Exchange Board of India (Sebi) regulations.

Twinstar is likely to adopt the creeping acquisition method to increase its stake in SIIL, which would be initially done through an inter se transfer of holdings. The most likely move by Twinstar will be to get Malcos 7.13 per cent stake transferred to itself, which will take Twinstars holdings to 62.26 per cent in SIIL. Further stakes could be acquired by way of creeping acquisitions.

Sterlites expansion plans include expansion of Balco and Malco, to take the groups combined annual aluminium capacity to 400,000 tonnes. Sterlite also expects to take its annual copper output up to 340,000 tonnes by December. Sterlite also owns the Mt Lyell and Thalanga copper mines in Australia having a combined capacity of 75,000 tonnes a year of copper in concentrates.