Wednesday, July 15, 2009

India's Sterlite To Raise $1.5 Billion Via Securities Issue in US

. Wednesday, July 15, 2009

By stockOzone team

Vedanta Group firm Sterlite Industries today said it will raise $1.50 billion through issue of securities in the US market.

The company is offering to issue and sell new equity shares in the form of American Depository Shares that is expected to result in gross proceeds of about $1.50 billion, Sterlite Industries said in a filing to the Bombay Stock Exchange.

The company plans to utilise the issue proceeds to develop its power generation business in India, meet the planned capital expenditure and for potential acquisitions, the filing added.

Besides, the parent firm Vedanta Resources would buy $500 million of the said issue, it said.

The ADS price to the public would not be less than $12.14 per share, Sterlite shared in a filing to the Securities and Exchange Commission.

JP Morgan Securities and Morgan Stanley & Co are acting as the joint book runner for the said offering.

The underwriters to the issue would have an over-allotment option equivalent to 15 per cent of the offering size, the company added.

Shares of Sterlite plunged 6.46 per cent to a low of Rs 588 in the morning trade on the BSE.

The ADS of Sterlite Industries closed at $12.94, up 6.50 per cent on the New York Stock Exchange yesterday.

Earlier this week, the shareholders of Sterlite had approved raising funds through the issue of securities in the form of American Depository Receipts (ADRs), Global Depository Receipts and foreign currency convertible bonds.

Disclosure: Author does not own any of the stocks discussed here.

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