Sterlite Industries Ltd will raise $2.8 billion through floats of American depositary shares (ADS) and convertible bonds to mark an entry into commercial power generation business through its wholly owned subsidiary, Sterlite Energy Ltd.
KOLKATA: Sterlite Industries Ltd will raise $2.8 billion through floats of American depositary shares (ADS) and convertible bonds to mark an entry into commercial power generation business through its wholly owned subsidiary, Sterlite Energy Ltd.
Sterlite, part of Anil Agarwal’s Vedanta Resources Plc, and India’s largest refined copper producer, will put up a 2,400 mw power generation plant in Jharsuguda, Orissa, where Vedanta Alumina is putting up a Rs 4,500 crore, 1 million tonne alumina project along with Vedanta Resources, which has announced a Rs 7,000 crore, 0.5 million tonne aluminium smelter.
The Sterlite board cleared the fund-raising proposal on Wednesday and shareholders’ clearance will be sought at an extraordinary general meeting scheduled for next month.
The board has also cleared increase of authorised capital from Rs 150 crore to Rs 175 crore by creating additional 12.5 crore equity shares of Rs 2 each. Clearly, Sterlite is keen to leverage the 70% rise in copper prices at the London Metal Exchange since early January, which has ensured a healthy appetite for papers of metal companies among global investors.
“The company should have no difficulty raising the money as appetite for metal shares is good. There is good demand for quality Indian assets,” said U P Bhatt of Canbank Investment Management.
Sterlite plans to invest around $1.9 billion on the Orissa power project and though company officials were not available for details, sources said the balance from the $2.8 billion raised could be used to ramp up capacity of Sterlite’s 0.3 million tonne per annum refined copper smelter in Tuticorin in Tamil Nadu. Vedanta’s proposed Rs 7,000 crore aluminium smelter project includes a 1,000 MW captive power plant.
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