London-listed Vedanta Resources said on Tuesday its shareholders have approved a proposal to merge three of its group companies in India ? Vedanta Aluminum, Sterlite Industries and The Madras Aluminum Company ? with iron ore miner Sesa Goa and allowed the parent company to sell its 38.7% stake in oil refiner Cairn India to Sesa Goa. The new company will be christened Sesa Sterlite.
Sesa Goa group, which owns 20.12% stake now in Cairn India, will control 58.82% stake in the latter, after the transfer, along with Vedanta subsidiaries? $5.9 billion debt, as they borrowed to purchase Cairn India in 2010.
Vedanta shares were trading 2.61% higher on the London Stock Exchange at 964.50 pence at 6.15 pm IST.
In February, Vedanta group announced a restructuring in both in Vedanta and Sesa Goa. On Tuesday, Sesa Goa shareholders cast their vote on a proposal to merge the three companies with itself and the results will be announced on June 25. Sterlite shareholders will cast their vote on June 21. Sesa Goa shares fell 3.01% to close at R177 on the BSE, while Sterlite Industries? shares were down 1.62% to close at R94.35.
The restructuring is part of a plan by owner Anil Agarwal to create the world?s seventh largest diversified natural resource company by operating profit and to balance the cyclicality of the metal business with his refining business. FII Franklin Templeton has opposed the merger, media reports said. Institutional Investor Advisory Services has also recommended voting ?against? the merger proposal.
