Wednesday, July 15, 2009

Suzlon, Sterlite To Raise USD 1 Billion

. Wednesday, July 15, 2009

By stockOzone team

Wind turbine maker Suzlon and the metal major Sterlite Industries are all set to raise over USD 1 billion in a month in order to retire debts and finance expansion plans respectively and for this purpose both the companies recently organized foreign roadshows as a precursor to these issues reports, Economic Times.

Suzlon Energy, India`s biggest turbine maker has decided to raise around USD 400 million through the issue of either American Depository Receipts (ADRs) or global depository receipts (GDRs) to retire debt.

Deutsche Bank has been given the mandate for the share sale, which would see equity dilution of 10-15%. Post the issue, the shareholding of the Pune-based Tanti family - the promoters will come down to 52% from 60%.

It is believed that Sterlite Industries is planning to raise anything between USD 500 million and USD 1 billion through a fresh issue of shares but has not yet finalized the instrument for the proposed fund raising. It would either be a qualified institutional placement (QIP) or an American Depository Receipt (ADR).

JPMorgan is believed to be Sterlite`s advisor to the issue, which would mainly finance the company`s expansion plans.

Sterlite has firmed up aggressive plans to invest Rs 200 billion to set up a 4,500 mw power capacity in a year. It also needs money to buy US copper miner Asarco for USD 1.1 billion in cash and USD 770 million in participatory notes.

Shares of Suzlon Energy gained Rs 2.65, or 2.95%, to trade at Rs 92.40. The total volume of shares traded was 6,078,316 at the BSE (11.40 a.m., Wednesday).

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

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