Impressions

India's Sterlite offers ADS

Sterlite Industries India Limited, a leading producer of copper in India is planning to raise about $2 billion by selling American Depository Shares (ADS) to fund expansions. The ADS will trade in NYSE under the symbol SLT. Sterlite is a subsidiary of Vedanta Resources Plc, a group with interests in metals and mining with annual sales of $1.9 billion. The main metals involved in Vedanta's operations are aluminium, copper, zinc and lead in India, Australia and Zambia.

Vedanta currently holds 79.25% of Sterlite. According to the Economic Times of India, the offering will be for 125 million shares with an option to offer 18.75 million shares based on demand. The price would be determined by the share price of Sterlite's Bombay Stock Exchange, India listed share price. It would not be more than five per cent or less than 10 per cent of its India price. The sale represents about 18.3% of Sterlite. Currently, Vedanta holds about 78% of Sterlite and after the sale will own 62.8%. According to the SEC filings, the sale will be managed by Citigroup, Morgan Stanley, Merrill Lynch and Nomura Holdings.

Sterlite is a leading producer of non-ferrous metals in India. Sterlite has a strong presence in the Indian copper market and is also present in the aluminium and zinc sectors. Sterlite's involved in manufacturing and marketing cast copper rods, copper cathodes, aluminium cold rolled products and conductors. Sterlite has more than 40% share of the India's copper market. It is one of the two leading domestic copper producers in India. Sterlite's copper operations include a smelter, refinery, phosphoric acid plant and copper rod plant at Tuticorin in Tamil Nadu, India; a refinery and copper rod plant at Silvassa in Dadar & Nagar Haveli, India and a copper mine in Australia. Last month, Sterlite beat rivals including Arcelor Mittal (MT) and India's Aditya Birla Group to buy 71 percent stake in India's biggest iron ore exporter Sesa Goa for $1.7 billion.

(This article was published as "Sterlite Industries India Offering American Depository Shares" on SeekingAlpha on June 11, 2007 and as "Sterlite Industries (India) to offer ADS" on GuruFocus on June 10, 2007.)

Labels: India, SLT

posted by Hari @ 6/09/2007 12:55:00 AM