Sterlite to make $500 million issue on LSE

The Anil Agarwal-controlled Sterlite group will make its debut on the London Stock Exchange with a $500 million foreign currency convertible bond issue.

A newly formed group company, Vedanta Holdings, will be listed on the exchange. Vedanta is the holding company for the group's non-ferrous metals business, which means it will hold stakes in Hindustan Zinc and Bharat Aluminium Company.

The float is being managed by HSBC Securities and J P Morgan Chase. Around 25 per cent of Vedanta's equity stake is likely to be divested.

The valuation, therefore, places the value of the holding company at $2 billion. Sterlite will now be the first Indian metals company with a primary listing on the LSE.

Sources involved with the issue told Business Standard, "The listing of Vedanta is likely to be announced any day now, possibly on Thursday."

Anil Agarwal, chairman and managing director of Sterlite Industries, and director (finance) Tarun Jain refused to respond to e-mail queries. Other senior executives, too, refused to comment on the issue.

The move is in line with Agarwal's long-cherished plan of making Sterlite the world's largest non-ferrous metals powerhouse. The group, which has embarked on an inorganic growth strategy, expects to achieve a turnover of around $5 billion by 2005.

Agarwal has been an active participant in the government's divestment programme. Having acquired a 51 per cent stake in Balco for around Rs 550 crore (Rs 5.50 billion) and a 26 per cent stake in Hindustan Zinc for Rs 445 crore (Rs 4.45 billion), he has now trained his sights on Nalco, the country's second largest aluminium company.

The proceeds of the fund-raising programme could be used to finance the Nalco acquisition, if the Sterlite group manages to buy it.

Sterlite has also announced a massive capacity expansion and modernisation programme at the manufacturing sites of Balco and Hindustan Zinc.

The company, which is on an acquisition spree, is scouting for copper mines across the globe.

It has bid for Konkola Copper Mines, the largest copper mine in Zambia. It already owns two copper mines in Australia.

London calling

• A newly formed group company, Vedanta Holdings, will be listed on the LSE.
• Vedanta is the holding firm of the group's equity stake in non-ferrous metals business.
• The float is being managed by HSBC Securities and JP Morgan Chase.
• Around 25 per cent of Vedanta's equity stake is likely be divested.