Sterlite gets its US$1.5 billion in a day after U.S. ADS offering
India's Sterlite Industries is not only gaining a following among U.S. Asarco creditors, as U.S. investors and Asian investors, as well as parent Vedanta, snapped up US$1.5 billion in ADSs in a single day.
Author: Dorothy Kosich
Posted: Friday , 17 Jul 2009
RENO, NV -
mineweb.com
Would-be Asarco white knight Sterlite Industries has filed an automatic shelf registration with the SEC to offer new American Depository Shares (ADSs) at US$12.15/sh to raise US$1.5 billion, accomplishing its $1.5 billion goal on Wednesday - see Indian mining and metals company Sterlite to raise $1.5bn in U.S..
Parent company Vedanta of India and the UK said it would subscribe for $500 million of ADSs in the offering either directly or through a subsidiary. The action has raised Vedanta's stake in Sterlite to 61.7%.
In a statement, Sterlite said it intends to use the net proceeds for "further development of its power generation business in India, planned capital expenditures, planned and potential acquisitions and/or general corporate purposes."
Vedanta Chairman Anil Agarwal said the ADS issue is the first in a series of actions that would soon include acquisition of mining assets in Africa and Central America.
India's Economic Times reported that a fourth of the ADS book was purchased by hedge fund investors with about 85 percent of demand coming from the U.S. and Asia.
Sterlite is hoping to attract a broader investor base. The company has been recently endorsed by a committee of unsecured Asarco creditors in the bidding war for bankrupt U.S. copper miner Asarco, whose executives also support Sterlite.
U.S. Bankruptcy Court Judge Richard Schmidt told the three bidders-whose ranks include former Asarco parent Grupo Mexico-to send their proposal to Asarco's creditors for a vote. The judge will take those votes into consideration when he renders his final decision of Asarco's proposed sale by the end of next month.
Sterlite has signed a Memorandum of Understanding to acquire Asarco for a cash component of $1.1 billion with a non-cash component of $770 million. Sterlite has also improved its terms of payment to asbestos claimants, who have been seeking personal injury claims settlements.
Grupo Mexico has countered with a $1.46 billion cash and $280 million note bid for Asarco. Hedge fund Harbinger Capital Partners has offered $500 million in cash. |
