Vedanta Resources To List On LSE

Mumbai, Nov 6: | Updated: Nov 7 2003, 05:30am hrs
In what is claimed to be the biggest listing on the London Stock Exchange (LSE) this year, Sterlite Group chairman Anil Agarwal-controlled Vedanta Resources will raise approximately $700 million through an initial public offer (IPO) on the LSE. The listing of Vedanta on the LSE will make it the first Indian company to go for a direct listing on an international stock exchange.

Vedanta Resources, which is 100 per cent owned by Anil Agarwal and his family, will own 55.2 per cent of Sterlite Industries India Ltd (SIIL) and 80 per cent of Madras Aluminium Company Ltd (Malco) through its wholly- owned subsidiary Twinstar Holdings Ltd.

Addressing the media in a tele-conference from London, Mr Agarwal said that Vedentas position in this industry gave it a strong platform to benefit from Indias mineral wealth and its dynamic economic growth.

Anil Agarwal has been designated as chief executive officer of the new company which has been formed exclusively for the purpose of listing at the LSE. Brian Gilbertsons and Peter Sydney-Smith have been appointed chairman and director (finance), respectively.

Mr Agarwal further informed that at least 25 per cent of Vedantas equity capital is expected to be diluted through the IPO, while further dilution may be considered later, leaving the promoter in complete control of the company.

Vedanta Resources, in its press release, stated that it intended to seek greater levels of economic interest in its underlying businesses.

The groups effective interest in SIIL is 60.8 per cent. The company further stated that the group intended to simplify the ownership structure by increasing its stake in Bharat Aluminium Company Ltd (Balco) and Hindustan Zinc Ltd (HZL).

Additionally, Vedanta will fund the groups growth programmes through debt and equity investments in its Indian businesses, subject to appropriate approvals.

Mr Gilbertson said, Vedantas asset base and strong market share in key commodities offer ground floor entry into the Indian economic boom. This capital raising will fund Vedantas set of growth opportunities, Mr Gilbertson added.

He informed that the company would come up with its offer document in a weeks time, which would have all the details of Vedantas IPO. Mr Gilbertson said that the company should get listed on the LSE by mid-December.

Vedanta Resources will be valued at almost $2.8 billion if it manages to rake in $700 million on 25 per cent of its equity. SIILs market capital as on November 6 stands at Rs 3,817.88 crore.

JP Morgan plc will act as financial adviser and sponsor to Vedanta Resources in connection with the admission to the official list of UK Listing Authority. HSBC and JP Morgan Securities Ltd are joint global co-ordinators of the proposed IPO.

Over the next three years, Vedanta aims to invest over $2 billion to expand current operations and drive down unit cost, and to develop a portfolio of greenfield projects. These will include Balco aluminium smelter expansion, Orissa alumina refinery and HZL expansion.

Of the $700 million to be raised, $200 million will be used for Balco smelter expansion, while approximately $300 to $400 million will be used for the greenfield Orissa-based 1.3 million tonne Vedanta Alumina Refinery project.