24th Apr 2007 07:03
Vedanta Resources PLC24 April 2007 24 April 2007 Mumbai and London Vedanta Resources Plc Acquires Sesa Goa Limited Highlights • Substantial entry into highly attractive iron ore business • Natural fit for Vedanta delivering further diversification • Strong growth potential • Immediately earnings and cash flow accretive Vedanta Resources plc ("Vedanta") announces that it has acquired 100% ofFinsider International Ltd, UK, (which owns a 51% controlling stake in Sesa GoaLimited ("Sesa")) from Mitsui & Co. Limited, Japan ("Mitsui") for US$981 million,implying a price of Rs. 2,036 per share. "This acquisition provides us with an industry leadership position in theattractive iron ore business in India." said Mr. Anil Agarwal, Chairman, VedantaResources plc. "Sesa is a natural fit for Vedanta; it is an efficient, low costminer with growth opportunities in one of the world's fastest growing economies.This transaction is immediately earnings and cash flow accretive and we believeit will create significant long term value for all our stakeholders." Vedanta will also make an open offer to the public shareholders of Sesa toacquire an additional 20% of Sesa (the "Open Offer") as per Indian regulations.Completion of the Open Offer is expected by July 2007. The total cash consideration for 71% of Sesa is US$1.37 billion. Theacquisition will be financed through a mix of newly committed bank debtfacilities of US$1.1 billion and existing cash resources. Sesa is India's largest private sector iron ore producer-exporter and isglobally cost-competitive. A well established company for over 50 years, Sesawas previously under Italian management before being acquired by Mitsui in 1996.Its mining operations are located in the iron ore rich states of Goa, Karnatakaand Orissa. It currently sells c10 million tonnes of iron ore, of which over 95%is exported to leading global steel companies in China, Europe and Japan. Atcurrent production rates, Sesa's iron ore reserves and resources of 207 milliontons will support over 20 years of mined production. Sesa's fully integrated pigiron and metallurgical coke facilities each have the capacity to producec250,000 tonnes per annum. Sesa is a highly profitable and debt free company. It reported group turnover ofUS$423.2 million, EBITDA of US$194.8 million and Profit Before Tax ofUS$193.8 million at 31 March 2006, with a net cash position of US$120.4 millionon that date. Its gross assets as at 31 March 2006 were US$276.2 million. Vedanta believes this acquisition will create significant long term value forall stakeholders through: • the creation of India's largest diversified mining group, with leading market positions in aluminium, copper, zinc and iron ore together with an industry leading pipeline of expansion projects; • further diversification through a substantial entry into the attractive iron ore business with industry leadership in India; • an ideal position to capitalise on India's huge iron ore reserves, the world's third largest; • access to long life, low cost, cash generative assets; • excellent debottlenecking/expansion opportunities at a low cost to significantly increase production of iron ore and pig iron by leveraging Vedanta's proven mining and project management skills; • longer term organic growth opportunities to increase production and resources by exploiting existing and accessing additional prospecting and mining licences; • optionality to participate in industry consolidation in India's highly fragmented iron ore industry; and • financial flexibility provided by a cash generative asset and a strong balance sheet. NOMURA, the Japan headquartered investment bank are the exclusive financialadvisors and Khaitan and Co., India and Travers Smith, United Kingdom are thelegal advisors to Vedanta in this transaction. For further information, please contact: Sumanth Cidambi [email protected] Director - Investor Relations Tel: +44 20 7659 4732 / +91 22 6646 1531Vedanta Resources plc Faeth Birch Tel: +44 20 7251 3801Robin WalkerFinsbury About Vedanta Resources plc Vedanta Resources plc is a London listed diversified metals and mining group.Its principal operations are located throughout India, with further operationsin Zambia and Australia. The major metals produced are aluminium, copper, zincand lead. For further information, please visit www.vedantaresources.com. About Sesa Goa Limited Sesa Goa Limited is India's largest exporter of iron ore in the private sector.For the past five decades, the Group has been involved in iron ore mining,beneficiation and exports. Over the last decade, it has diversified into themanufacture of pig iron and metallurgical coke. Sesa Goa Limited has miningoperations in Goa, Karnataka and Orissa. For further information, please visitwww.sesagoa.com. Disclaimer This press release contains "forward-looking statements" - that is, statementsrelated to future, not past, events. In this context, forward-looking statementsoften address our expected future business and financial performance, and oftencontain words such as "expects," "anticipates," "intends," "plans," "believes,""seeks," "should" or "will." Forward-looking statements by their nature addressmatters that are, to different degrees, uncertain. For us, uncertainties arisefrom the behaviour of financial and metals markets including the London MetalExchange, fluctuations in interest and or exchange rates and metal prices; fromfuture integration of acquired businesses; and from numerous other matters ofnational, regional and global scale, including those of a political, economic,business, competitive or regulatory nature. These uncertainties may cause ouractual future results to be materially different that those expressed in ourforward-looking statements. We do not undertake to update our forward-lookingstatements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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