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Our Bureau

Mumbai, Feb. 26 After it aborted attempt in September to consolidate stake in the Indian subsidiaries, London Stock Exchange-listed Vedanta Resources on Thursday made an offer to buy back the remaining shares of Madras Aluminium Ltd (Malco), thereby paving the way for its delisting from the Bombay Stock Exchange.

Mauritius-based Twin Star Holdings, a Vedanta subsidiary, has made a buy back offer at a maximum price of Rs 105 a share, for up to 22.5 million fully paid equity shares of Malco, representing 20 per cent of the outstanding issued share capital. The offer tender will be open from March 17 to 20.

The minimum floor price for the reverse book-building process has been set at Rs 74.77 a share.

NRI billionaire Anil Agarwal-controlled Vedanta currently own 80 per cent in Malco, which has an annual production capacity of 40,000 tonnes. If the buyback offer sails through, Vedanta’s ownership in other group companies will also increase. Subsequently, its holding in Sterlite Industries will go up to 64.5 per cent from 63.6 per cent, Hindustan Zinc to 41.9 per cent from 41.3 per cent, Bharat Aluminium to 32.9 per cent from 32.4 per cent, Vedanta Aluminium to 89.5 per cent from 89.3 per cent and Sterlite Energy to 64.5 per cent from 63.6 per cent, said an analyst.

The non-ferrous metals major Vedanta Resources in September last year shelved its proposal to restructure and consolidate its holding in group companies, besides simplifying the corporate structure and eliminate conflicts of interest between the different group companies. The group planned to have three commodity-based verticals: copper, zinc and lead; aluminium and energy; and iron ore.

Its group company Sterlite Industries was to de-merge its aluminium and energy businesses to Malco, which was subsequently to be renamed as Sterlite Aluminium Ltd. Further, Vedanta was to transfer its 79.4 per cent equity interest in its mining subsidiary Konkola Copper Mines (KCM) to Sterlite. After the restructuring, Vedanta was to have three companies under its fold - Sterlite (which was to have Hindustan Zinc Ltd, CMT and KCM), Vedanta Aluminium Ltd and Sesa Goa. The restructuring proposal would have also changed the shareholding pattern. An analyst had then said the restructuring was favourable to Vedanta shareholders, but not for their counterparts in Sterlite.

Boosted by the buyback offer, Malco shares in BSE gained five per cent to Rs 95, while Sterlite Industries was up 2.37 per cent at Rs 253, Sesa Goa jumped 3 per cent to Rs 82 and Hindustan Zinc closed flat at Rs 319 on Thursday.

More Stories on : Open Offers | Mergers & Acquisitions | Aluminium

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