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|Mitsui To Sell Its Sesa Goa Shares To UK Metals, Mining Group|
|= For US$981 million in cash; after-tax proceeds about 50 billion yen =|
Mitsui & Co announced April 24 it has agreed to sell a whole of its issued shares of UK-based holding company Finsider International Company Ltd which has a 51% stake in Indian iron ore company Sesa Goa Ltd to a diversified and integrated metals and mining group Vedanta Resources plc headquartered in the UK. The acquisition price is reportedly US$981 million, and the after-tax proceeds from this transaction will be approximately 50 billion yen.|
Sesa Goa is one of Indiafs major private-sector iron ore suppliers with its operations in Karnataka and Orissa States. It is also a producer of coke and pig iron. During the fiscal year 2005 / 06 the Company sold 9,559 kilo tons (Kt) of iron ore (down 2.6% from the previous year), 242 Kt of coke (down 5.1%), and 199 Kt of pig iron (down 19.1%).
Mitsui became the top shareholder of Sesa Goa after it purchased a 51% Sesa Goa equity ownership in October 1996 from Finsider International (now ILVA). Mitsuifs move to a possible sale of its Sesa Goa shares\as part of its strategy to review its portfolio to create shareholder value\was in a spotlight in December 2006, drawing much attractions of steelmakers and resources companies.
The market capitalization of Sesa Goa as of March 31, 2006 was Rs 50,572 million (approximately US$1.14 billion based on US$1 = ca Rs 44.50). It is said the imposition in March 2007 of the Rs 300 tax on iron ore exports has given a degree of impact on the present transaction.
According to Mitsui iron ore business is one of its core businesses and this status will remain unchanged.
Vedanta Resources is a FTSE 100 company listed in London Stock Exchange, whose principal operations are located in India, Australia and Zambia, with its production line-up including aluminium, copper, zinc, tin and gold.
Vedanta meanwhile announced it will also make an open offer to the public shareholders of Sesa Goa to acquire an additional 20% of the Sesa Goa shares to aim at an eventual total acquisition of 71%. The cash consideration for the 71% Sesa Goa shares is US$1.37 billion, which will be funded through a mix of newly committed bank debt facilities of US$1.1 billion and existing cash resources.
|last modified : Mon 07 May, 2007 [12:48]|