Sterlite To Demerge Aluminum and Energy Businesses

(RTTNews) - Sterlite Industries India Ltd., India's largest non-ferrous metals and mining company with operations in aluminium, copper, zinc and lead, said that its parent company Vedanta Resources Plc. has announced a scheme of restructuring to simplify the group corporate structure into three commodity-focused verticals, namely, Copper and Zinc-Lead, Aluminium and Energy and Iron Ore. The group believes that the corporate restructuring will simplify the corporate structure, eliminate conflicts of interest and increase efficiency. The corporate restructuring is expected to be completed by March 2009 and the scheme will be effective from April 1,2009, the company said. The Tuticorin-based company said that the boards of Vedanta, Sterlite and The Madras Aluminium Company Ltd. or Malco have unanimously approved the scheme of restructuring of entities and businesses of the group. Under the scheme, Sterlite will demerge its aluminium and energy business to Malco (to be simultaneously renamed Sterlite Aluminium Ltd.) and Vedanta will transfer its 79.4% equity interest in Konkola Copper Mines Plc. to Sterlite. The scheme will also eliminate cross holdings between businesses arising out of Malco's holding in Sterlite. Swap Ratios Consequent to the restructuring, Malco will issue equity shares of Rs.2 each in the ratio of 7:4 to the shareholders of Sterlite, while Sterlite will issue equity shares of Rs.2 each in the ratio of 1:1 to THL KCM Ltd., a wholly owned subsidiary of Vedanta. Besides, Sterlite will issue equity shares of Rs.2 each in the ratio of 1:5 to the shareholders of Malco. To ensure the equitable treatment for all shareholders, Grant Thornton India, JM Financial Consultants Private Ltd. has conducted independent valuation and provided a fairness opinion on the share swap ratio. The scheme is expected to be completed in March 2009 and is subject to the requisite approvals of the shareholders, creditors, lenders, Indian Stock Exchanges, Indian Mauritius Courts and such other regulatory authorities. The company said the buyout of minorities in both Bharat Aluminium Company and Hindustan Zinc Ltd. would remain unaffected by the restructuring. The Chairman of Vedanta, Anil Agarwal, said, "We are delighted to announce a significant milestone for the group in the streamlining of our corporate structure following a number of years of industry leading growth." At the BSE, Four Soft shares are currently trading at Rs.581.50, down by Rs.40.85 or 6.56% on volume of 19.55 lakh shares.