9/20/2011 2/28/2012 Sterlite Industries 3361.00 133.85 INR 120.95 INR Sesa Goa 869.00 223.50 INR 208.20 INR No Currency Conversion 1.0000 1.0000 Cost of Buying Shar 120.95 INR Share Conversion fo Success 130.42 INR Failure 130.17 INR x -15.57920674 Combined Equity Va 587,438.75 INR S Min 8,417.08 INR SESA GOA- STERLITE DEAL Outstanding Shares (in Millions) Closing Prices The record date for determining the list of the shareholders of Sterlite, MALCO and Ekaterina to whom the equity shares of the Sesa Goa will be allotted as per terms of the scheme has been fixed as 28 August, 2013.Every equity shareholder of Sterlite Industries holding 5 equity shares of Re 1 each shall get 3 shares of face value Re. 1 each of the Sesa Goa. 120.95 = 1 Combined as on Fe =Rs. β, 587.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
9/20/2011 2/28/2012
Sterlite Industries 3361.00 133.85INR 120.95INR
Sesa Goa 869.00 223.50INR 208.20INR
No Currency
Conversion 1.0000 1.0000
Cost of Buying Shares of Sterlite 120.95INR Share Conversion for Sterlite to Sesa Goa
Success 130.42INR
Failure 130.17INR
x -15.57920674
Combined Equity Valuation 587,438.75INR
S Min 8,417.08INR
SESA GOA- STERLITE DEAL
Outstanding Shares (in
Millions)
Closing Prices
The record date for determining the list of the shareholders of Sterlite, MALCO
and Ekaterina to whom the equity shares of the Sesa Goa will be allotted as per
terms of the scheme has been fixed as 28 August, 2013.Every equity
shareholder of Sterlite Industries holding 5 equity shares of Re 1 each shall get 3
Sterlite Industries (India) Limited is Indiaβs largest diversified metals and mining company.The Company a part of the Vedanta Group produces aluminium, copper,
zinc, lead, silver, and commercial power. It has a portfolio of world class assets in India, Australia, Namibia, South Africa and Ireland. Sterlite is listed on the
Bombay Stock Exchange and National Stock Exchange in India and the New York Stock Exchange in the United States.
Sesa Goa Limited is Indiaβs largest producer and exporter of iron ore in the private sector and a subsidiary of Vedanta Resources Plc., the London listed FTSE 100
diversified metals and mining major.
NEWS 17 Aug 2013
Sesa Goa and Sterlite Industries, in a joint statement, both the companies said that merger of Sterlite and Malco into Sesa Goa has become effective pursuant to
the scheme of amalgamation and arrangement amongst Sterlite, Malco, Sterlite Energy, Vedanta Aluminium and Sesa Goa and their shareholders and creditors.
The merger, first announced on February 25, 2012, is aimed at creating a mega Indian natural resources giant, Sesa Sterlite, on the likes of BHP Billiton and Rio
Tinto. It would also result in a Rs 1,000 crore annual saving for Vedanta through a reduction in debt-servicing cost as most of its debt gets transferred to the new
entity.
On the record date (August 28), Sterlite shareholders will get three shares of Sesa Goa for every five shares held, according to the swap ratio. Malco shareholders
will get 7 shares of Sesa Goa for their every 10 share of Rs 2 each.
Cairn India, Hindustan Zinc, Balco, Vedanta Aluminium, Madras Aluminium, Western Clusters in Liberia, Talwandi Sabo Power and Australian Copper Mines have
now become subsidiaries of Sesa Sterlite after the restructuring.
The new company has total assets worth $36 billion (Rs 1,95,000 crore), net income of $1.9 billion (Rs 10,000 crore) and cash and liquid investments of $7.7 billion
(Rs 42,000 crore) as on March, 2013.
It will also inherit almost 87% of Vedanta's debt, which was $16.593 billion in March 2013, as loans taken to fund the Cairn India acquisition get transferred to Sesa
Sterlite. Accordingly, Sesa Sterlite has a debt of $14.399 billion.
Outstanding Shares
(in Millions)
Closing Prices
The record date for determining the list of the shareholders of Sterlite,
MALCO and Ekaterina to whom the equity shares of the Sesa Goa will be
allotted as per terms of the scheme has been fixed as 28 August, 2013.Every
equity shareholder of Sterlite Industries holding 5 equity shares of Re 1 each
shall get 3 shares of face value Re. 1 each of the Sesa Goa.
Implied Probability of Success for the Deal
Cost of buying shares: Rs. 90.2
No reasonable operational synergies are visible
Suppose that investor reinvests the proceeds from short position of Sterlite at a risk-free rate and he maintains short
position for a period of 7 months, then implied probability of success is:
TRUE SYNERGY FROM SESA GOA & STERLITE INDUSTRIES DEAL
Sterlite Industries (India) Limited is Indiaβs largest diversified metals and mining company.The Company a part of the Vedanta Group produces aluminium, copper,
zinc, lead, silver, and commercial power. It has a portfolio of world class assets in India, Australia, Namibia, South Africa and Ireland. Sterlite is listed on the
Bombay Stock Exchange and National Stock Exchange in India and the New York Stock Exchange in the United States.
Sesa Goa Limited is Indiaβs largest producer and exporter of iron ore in the private sector and a subsidiary of Vedanta Resources Plc., the London listed FTSE 100
diversified metals and mining major.
NEWS 17 Aug 2013
Sesa Goa and Sterlite Industries, in a joint statement, both the companies said that merger of Sterlite and Malco into Sesa Goa has become effective pursuant to
the scheme of amalgamation and arrangement amongst Sterlite, Malco, Sterlite Energy, Vedanta Aluminium and Sesa Goa and their shareholders and creditors.
The merger, first announced on February 25, 2012, is aimed at creating a mega Indian natural resources giant, Sesa Sterlite, on the likes of BHP Billiton and Rio
Tinto. It would also result in a Rs 1,000 crore annual saving for Vedanta through a reduction in debt-servicing cost as most of its debt gets transferred to the new
entity.
On the record date (August 28), Sterlite shareholders will get three shares of Sesa Goa for every five shares held, according to the swap ratio. Malco shareholders
will get 7 shares of Sesa Goa for their every 10 share of Rs 2 each.
Cairn India, Hindustan Zinc, Balco, Vedanta Aluminium, Madras Aluminium, Western Clusters in Liberia, Talwandi Sabo Power and Australian Copper Mines have
now become subsidiaries of Sesa Sterlite after the restructuring.
The new company has total assets worth $36 billion (Rs 1,95,000 crore), net income of $1.9 billion (Rs 10,000 crore) and cash and liquid investments of $7.7 billion
(Rs 42,000 crore) as on March, 2013.
It will also inherit almost 87% of Vedanta's debt, which was $16.593 billion in March 2013, as loans taken to fund the Cairn India acquisition get transferred to Sesa
Sterlite. Accordingly, Sesa Sterlite has a debt of $14.399 billion.
Minimum Synergy
Implied Probability of Success for the Deal
Proceeds on Success = Rs.104.934
Proceeds on Failure = Rs104.92 β Rs147.12 + Rs 133
= Rs90.814
No reasonable operational synergies are visible
Suppose that investor reinvests the proceeds from short position of Sterlite at a risk-free rate and he maintains short
position for a period of 7 months, then implied probability of success is:
TRUE SYNERGY FROM SESA GOA & STERLITE INDUSTRIES DEAL
= Rs90.814
Combined equity valuation as on August 28, 2013
On Deal Success: = 15.77% Γ 660 + ππππ