HC approves Sterlite Industries’ demerger

OCT 4: Under the scheme of arrangement, SOTL would issue one equity share of the face value of Rs five, each fully paid-up to every person...

OCT 4: Under the scheme of arrangement, SOTL would issue one equity share of the face value of Rs five, each fully paid-up to every person holding one fully paid-up equity share of the company, sources in Sterlite told PTI here.

Consequent to the scheme of arrangement approved by the court, the capital of the company would be appropriately reduced, so that the face value of the equity shares of the company, after the demerger of the telecom division, would be reduced to Rs five per equity share of the company, they said.

Keeping in line with its plans for telecom demerger, the board of directors of Sterlite had, earlier this year, appointed Arthur Anderson for valuation, capital restructuring, determining demerger and share exchange ratio.

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The demerger of the company was targeted at giving sharper focus to the telecommunication and non-ferrous mining and metals business, thereby leveraging on respective inherent business strengths and also aimed at enabling future value creation and enhanced shareholder value.

Announcing its plans for demerger earlier this year, Sterlite has said that all shareholders would receive one new fully paid-up equity share of Rs five each in the new telecom company for every fully paid-up equity share of Rs 10 each held by them in Sterlite.

The equity capital of the company, prior to the demerger comprised 5,59,12,559 equity shares of Rs 10 each aggregating Rs 55.19 crore.

After the demerger of the telecom business, the equity capital of the telecom company was expected to comprise 5,59,12,559 equity shares of Rs five each aggregating Rs 27.95 crore.

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The company which has identified telecom as the key growth segment, recently entered into a strategic alliance with global telecom giant Alcatel to address telecom opportunities in India, especially with respect to providing turnkey networking solutions to create Optical Fibre bandwidth for convergence of technologies.

The alliance is expected to provide a comprehensive range of services for creation of optical fibre bandwidth. The company is also currently in the process of doubling its capacity to three million fibre km by mid next year and up to 10 million fibre km by 2005.

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