Vedanta Resources, the holding company of Sterlite Industries, is planning to increase its stake in the company to 75 per cent from its current holding of 65 per cent.
Peter Sydney Smith, CFO, Vedanta, said: "We are looking at bringing in more funds into Sterlite. We are considering the option of increasing our stake in Sterlite to the permissible 75 per cent. We may try to bring in the funds through loans or through external commercial borrowings as well."
Vedanta has recently hiked its stake in Sterlite to 60 per cent from 55.1 per cent by purchasing 4.98 per cent shares from the market. The acquisition had raised Vedanta's stake in Sterlite to 65.8 per cent owing to the additional 5 per cent stake that it owns in Sterlite, through its 80 per cent subsidiary Madras Aluminium Compnay. Madras Aluminium holds 7 per cent in Sterlite.
"About 50 per cent of the total proceeds of the Vedanta IPO have already come in to Sterlite. We are looking at bringing in some more funds in the near future," Smith added. Vedanta Resources raised $1 billion at the London Stock Exchange at pounds 3.9 a share.
Sterlite had also come out with a 3:10 rights issue in December 2003, which will rake in Rs 1,400 crore. The company had come out with a rights issue to transfer the funds from Vedanta into Sterlite. Sterlite has slated an investment of $2 billion for its expansion projects in its group firms Balco and Hindustan Zinc.
The company will be investing $800 million for the expansion at Balco to take the installed capacity to 3.5 lakh tonne a year and another $800 million for setting up an alumina refinery in Orissa with 1.4 million tonne a year.
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