New Delhi: Vedanta Aluminium (VAL), a subsidiary of London-listed Vedanta Resources, has acquired 24.5 percent stake in Larsen and Toubro-promoted Raykal Aluminium, that holds certain bauxite mining licences in Odisha, for Rs 200.70 crore. (Agencies)
In phases, VAL will fully acquire Raykal Aluminium for Rs 1,811 crore, although it is subject to certain milestones being achieved, a filing made to US Securities and Exchange Commission (SEC) on May 31 by its sister firm Sterlite Industries showed.
As per the filing, the deal was signed on February 23 this year, two days before a group restructuring exercise was announced by its parent Vedanta Resources.
However, no announcement related to the deal has been made by VAL or Sterlite, which holds 30 percent stake in VAL, to the Indian regulatory authorities so far.
"On February 23, 2012, the company entered into a tripartite agreement with Larsen & Toubro Limited and Raykal Aluminium Company Private Ltd (Raykal)... As on the balance sheet date, the company has acquired 24.5 percent of the share capital of Raykal for a consideration of Rs 200.70 crore," Sterlite said in its filing to the US SEC.
Stating that L&T holds certain prospecting licences for bauxite mines located at Sijmali and Kurumali of Rayagad and Kalahandi districts of Odisha, Sterlite said that after this agreement, "entire bauxite excavated from the above mines will be available for the use of Raykal and/or to the company (VAL)".
The acquisition would help Vedanta Aluminium in securing bauxite for its alumina refinery in Odisha's Lanjigarh, as the two mines are estimated to hold about 250-280 million tones of reserves.
The mines are also near by VAL's plant site at Lanjigarh, where it operates 1 million tonnes per annnum (MTPA) capacity alumina refinery.
Of late, the company has been struggling to meet with the rising costs as it buys bauxite, a key raw material for making alumina, from the open market.
In 2011-12, it had reported a net loss of Rs 2,618 crore as its cost of production had increased to USD 2,188 per tone (about Rs 1.5 lakh per tonne) in the last fiscal.
Besides, VAL has been denied environmental clearances for expanding the refinery capacity to 5 MTPA and mining bauxite at nearby Niyamgiri hills with Orissa Mineral Development Corporation.
New Delhi: Vedanta Aluminium (VAL), a subsidiary of London-listed Vedanta Resources, has acquired 24.5 percent stake in Larsen and Toubro-promoted Raykal Aluminium, that holds certain bauxite mining licences in Odisha, for Rs 200.70 crore.