Each one in plain English, with the numbers worked through for a shareholder.
19 Nov 2021asset acquisition disposition● NeutralMajor
The Supreme Court ruled on 18 November 2021 that the Government of India may go ahead with selling its entire stake in Hindustan Zinc Limited, a Vedanta subsidiary, in the open market under SEBI rules. It held that HZL is no longer a Government company, so the Government is entitled to exercise its rights as a shareholder. The court also directed the CBI to register a regular case over how HZL was disinvested in 2002. The filing gives no sale price, timing or buyer, and does not state any effect on Vedanta's own holding in HZL.
Vedanta's subsidiary Monte Cello BV signed a term sheet to divest Copper Mines of Tasmania, owner of the Mt Lyell copper mine in Australia, through an option agreement with New Century Resources. The mine has been on care and maintenance since 2015, and the filing calls it small and not strategic for Vedanta. New Century must spend at least US$10 million over the two-year option period and reimburse care and maintenance costs, with a right to terminate after 12 months. Full documentation was expected by the end of October 2021.
Vedanta filed notice that its 13th Sustainability Report for FY 2020-21 is available on its website. The filing contains no deal, financial or operating figures.
Vedanta announced it intends to delist its American depositary shares from the NYSE and end its ADS programme, planning to file Form 25 around 29 October 2021 and later deregister with the SEC. It cites low ADS trading volume and the costs of the listing. Trading will then be concentrated on BSE and NSE in India. This ends the NYSE listing set up through the 2013 Citibank deposit agreement; ADS holders can swap into Indian shares by 8 December 2021, after which Citibank may sell the remaining shares and pay out the proceeds, subject to Indian withholding tax of up to 43.68%.
Vedanta's board approved internal group restructuring: selling its stakes in Sterlite Ports and Paradip Multi Cargo Berth (consideration INR 16.26 crore and INR 1) to its own subsidiary Sesa Resources, then merging them and two port subsidiaries into Sesa Mining Corporation. It also approved merging Facor Power into FACOR (acquired in 2020) and Vedanta buying 26% of Facor Power from FACOR. The filings say these are related-party deals at arm's length meant to simplify the structure, and the amalgamations need tribunal approval.
After a 30 January 2020 order by the National Company Law Tribunal (Cuttack), Vedanta is implementing its approved plan to take over insolvent Ferro Alloys Corporation (FACOR), a ferro chrome producer in Odisha, holding 100% of it. It pays INR 10 crore plus the cash balance in subsidiary FACOR Power, plus zero-coupon debentures of INR 270 crore face value to creditors, payable equally over 4 years from March 2021. This is a second insolvency-process acquisition after Electrosteel, and the filing says it complements Vedanta's steel business.
Vedanta reported an oil discovery in its second exploration well, H2, in block KG-OSN-2009/3 in the Krishna-Godavari Basin, where it holds 100%. A zone tested by drill stem test flowed oil to surface, but the filing says further appraisal is needed to establish size and commerciality. The first well in the block was a gas discovery, and the forward programme is still to be finalised.
Vedanta's board declared a second interim dividend of Rs. 1.85 per share for FY 2018-19, totalling Rs. 685 crore, with a record date of 14 March 2019. The company says this brings the year's total dividend to Rs. 18.85 per share, about an 8% yield on its one-year average share price.
The Government of India approved a ten-year extension of the Rajasthan Block (RJ-ON-90/1) production sharing contract, which was due to expire on 14 May 2020, so it now runs from 15 May 2020 for another 10 years. This is the block from the Cairn India business merged in 2017; Vedanta holds 70% directly and via a subsidiary, and ONGC holds 30%. The extension is subject to certain conditions, and the filing says the applicability of the extension policy to this contract is currently sub judice (before the courts).
The National Company Law Tribunal (Kolkata) approved Vedanta's resolution plan for Electrosteel Steels, making its terms binding; this follows the March 2018 Letter of Intent. A wholly owned Vedanta subsidiary will put in INR 1,805 crore (US$275.7m) of equity and INR 3,515 crore (US$536.9m) of debt, which Electrosteel will use to pay its financial creditors INR 5,320 crore (US$812.6m). Vedanta would hold about 90%, funded from existing cash; the filing says the directors expect no material earnings impact in the year to March 2019, and completion still needs approvals including from the Competition Commission of India and SEBI. Electrosteel lost INR 1,463.48 crore in the year to March 2017.
Vedanta said on 31 March 2018 that creditors of Electrosteel Steels Limited, which is in insolvency proceedings, declared it the successful resolution applicant and sent it a Letter of Intent, which Vedanta accepted. Closing depends on regulatory requirements and the final terms approved by the National Company Law Tribunal; no price is given in this filing.
Vedanta announced that its wholly owned subsidiary Cairn India Holdings approved a c.US$158 million investment in AvanStrate, a Japanese maker of LCD glass substrate majority owned by the Carlyle Group. It covers c.US$151 million to buy existing debt (face value c.US$299 million) from banks, just over 51% of the equity for a nominal sum, and a c.US$7 million loan. Completion depends on consent from AvanStrate's lenders and is expected before 31 December 2017. This is a new business line outside the metals and oil and gas operations; the filing describes it as giving 'optionality' to technology materials.
Vedanta announced that the Cairn India merger became effective on 11 April 2017, completing the deal planned since 2015 and revised in July 2016. Cairn India shareholders on the 27 April 2017 record date receive 1 Vedanta share and 4 7.5% redeemable preference shares per Cairn share, plus an interim dividend of Rs. 17.70 per share; Vedanta says it will arrange a third-party cash exit at par for the preference shares within 30 days of issue. Cairn India's own shares are cancelled under the scheme (the 2016 information statement said it would cease to exist).
Vedanta's shareholders and creditors approved the Cairn India merger scheme at meetings on 8 September 2016: 97.84% by number and 99.99% by value of those voting at the court-convened meeting, and 99.98% by value of public shareholders in the postal ballot (promoters did not vote on that item). A related capital reduction was approved with 99.97% of votes in favour. This clears the shareholder votes; the scheme still needs High Court and regulatory approvals.
Vedanta filed an information statement dated 8 August 2016 on its plan to merge Cairn India (the oil and gas company in which it already owned 59.88%) into itself. The original June 2015 terms were revised on 22 July 2016: each Cairn India shareholder (other than Vedanta and its subsidiaries) would get one Vedanta share plus four 7.5% redeemable preference shares of Rs. 10 each, with a tenure of 18 months, instead of one preference share. After the deal Vedanta Resources plc would own 50.1% of Vedanta and Cairn India's outside shareholders 20.2%. This is the Cairn India transfer that the earlier planned structure pointed to, now being done as a full merger; it still needs shareholder and High Court approval.
The company filed paperwork confirming its name change from Sesa Sterlite Limited to Vedanta Limited, effective 21 April 2015. The board approved it on 29 January 2015 and shareholders approved it by postal ballot dated 30 March 2015. The filing attaches the name-change certificate, a specimen share certificate and the Memorandum and Articles of Association; it is a name change only, with no deal or financial figures. The Articles list also records court orders (12 and 25 March 2015) approving the merger of Goa Energy Limited and Sterlite Infra Limited into the company.
The company, now named Sesa Sterlite after the merger was completed in August 2013, announced board and leadership changes. Tom Albanese (formerly Rio Tinto's chief executive) becomes CEO from 1 April 2014, replacing M.S. Mehta, and Navin Agarwal becomes Chairman with Anil Agarwal moving to Chairman Emeritus. Other directors join or step down as listed in the release.
Sesa Goa signed a deposit agreement with Citibank on 6 September 2013 to set up its American Depositary Share facility for NYSE listing, with each ADS representing four shares. It also took over all of Sterlite's obligations under its 4.00% Convertible Senior Notes due 2014 through a supplemental indenture effective 9 September 2013. Both are follow-through steps of the merger: Sterlite ADS holders are to exchange into Sesa ADSs, and Sterlite's convertible debt now sits with Sesa Goa.
On 29 August 2013 Sesa Goa issued new shares under the merger schemes: about 1,944.5 million to Sterlite shareholders (3 for every 5), about 78.7 million to MALCO shareholders (7 for every 10) and about 72.3 million to Ekaterina shareholders (1 for every 25). Paid-up share capital rose from Rs. 869,101,423 to Rs. 2,964,674,487; the new shares still need Indian exchange listing and trading approval. This is the share exchange the earlier merger plan described, now carried out.
The Bombay High Court (Goa bench) approved the Sterlite/Sesa Goa merger scheme by order dated 3 April 2013. The Madras High Court hearings have finished but its order is still awaited, so the merger is not yet fully cleared.
Sterlite's equity shareholders approved the merger scheme at the court-convened meeting on 21 June 2012, with 89.75% of valid members by number and 92% by value voting in favour. This clears the shareholder vote, but the scheme still needs approval from the Madras High Court.
Sterlite (the Vedanta Group's Indian metals company) filed an information statement for a proposed all-share merger with Sesa Goa, MALCO, Sterlite Energy and Vedanta Aluminium to form Sesa Sterlite. Sterlite shareholders would get three Sesa shares for every five Sterlite shares (and three Sesa ADSs for every five Sterlite ADSs), with Vedanta Resources plc expected to own 58.3% afterwards. The scheme still needs shareholder votes and approval from two Indian High Courts, and the filing says management expects synergies with an earnings impact of over US$200 million a year for the first four fiscal years.
