Sterlite Shareholders May Get Conversion Option

Mumbai, Nov 6: | Updated: Nov 7 2003, 05:30am hrs
Shareholders of Sterlite Industries India Ltd (SIIL), in which Vedanta Resorces will hold 55.5 per cent, are likley to get an option to convert their shares into shares of Vedanta Resources after it gets listed on the London Stock Exchange (LSE).

The company has, however, said that no assurance can be given on the proposed exchange offer. To a query on what the listing of Vedanta means to SIIL shareholders, Vedanta chief executive officer and SIIL chairman Anil Agarwal said: Shareholders will be given an opportunity to exchange SIIL shares for shares in Vedanta.

He, however, did not give any indication of what the conversion ratio would be. Mr Agarwal added that this would be subject to approvals from the regulatory authorities.

A Vedanta Resources press release, on the issue of conversion of SIIL to Vedanta shares reads: The directors of Vedanta would like to offer the minority shareholders in SIIL the ability to exchange their shareholding in Sterlite for shares in Vedanta Resources. As a result, the directors are continuing to explore structures that enable such an exchange offer to occure while satisfying both Indian and UK regulatory and legal requirements. There can be no assurance that it will be possible to implement the proposed exchange offer.

Vedanta further stated that it intends to seek greater levels of economic interest in its underlying businesses. The groups effective interest in SIIL is 60.8 per cent. The two major subsidiaries of SIIL comprise Balco and HZL, in which SIIL holds 51 per cent and 46 per cent, respectively.

Further, the company has said that the group intends to simplify the ownership structure by increasing its stake in Balco and HZL. Additionally, it will seek to increase its ownership in SIIL by further acquisition of shares, through creeping acquisition route, subject to regulatory approvals.

Vedanta will also fund the groups growth programme through debt and equity and investments in its Indian businesses, the release stated.

Mean while SIIL shares today breached the upper circuit to reach Rs 1062.75 on the stock exchange, Mumbai (BSE).SIIL shares today opened at Rs 966.15. The price of Rs 1062.75 is a 52 week high for SIIL stock, the companys stockes had touced a 52 week low on Novermebr 25, 2002 at Rs 135.