Business standard
VAL to buy MALCO's power business for Rs 150cr
Edited by : AL CIRCLE
2 min read
Vedanta Aluminum Limited (VAL) is planning to buy Madras Aluminium Company Limited (MALCO)’s power business for a consideration of around Rs 150crore. The group will also amalgamate Malco with Sesa Goa Limited (SGL).
According to Sterlite Industries (India) Limited, a group company of VAL, as part of the overall amalgamation within the group companies, MALCO, post the hiving off of its power business undertaking into VAL, will be merged with SGL. “Upon vesting of all the assets and liabilities of the power business undertaking of MALCO into VAL, VAL will pay Malco a lump-sum cash consideration of around Rs 150cr,” said a note from Sterlite Industries.
MALCO, the operating company of Vedanta in commercial power generation, generates 100Mw of power from four units of 25Mw each through a power plant located at Mettur in Tamil Nadu.
Around 90% of the entire power generated is exported, while the rest is used internally. The company is one of the largest private sector merchant power suppliers in Tamil Nadu, the company officials said.
The proposed amalgamation is part of the Vedanta Group’s scheme of amalgamation and arrangement, which envisages amalgamation of Sterlite Industries with SGL, vesting of the power business undertaking of MALCO into VAL, amalgamation of MALCO into SGL, amalgamation of Sterlite Energy Limited (SEL) into SGL and demerger of aluminium business undertaking of VAL into SGL.
According to Sterlite Industries, the restructuring is expected to simplify the group structure and make it more transparent by eliminating cross holdings. The re-organization will consolidate and simplify the group’s structures, will eliminate cross holdings within the group, will enhance in earnings and cash flow visibility, improved alignment of debt and cash flows and synergies arising out of the consolidation of the business.
According to Sterlite Industries (India) Limited, a group company of VAL, as part of the overall amalgamation within the group companies, MALCO, post the hiving off of its power business undertaking into VAL, will be merged with SGL. “Upon vesting of all the assets and liabilities of the power business undertaking of MALCO into VAL, VAL will pay Malco a lump-sum cash consideration of around Rs 150cr,” said a note from Sterlite Industries.
MALCO, the operating company of Vedanta in commercial power generation, generates 100Mw of power from four units of 25Mw each through a power plant located at Mettur in Tamil Nadu.
Around 90% of the entire power generated is exported, while the rest is used internally. The company is one of the largest private sector merchant power suppliers in Tamil Nadu, the company officials said.
The proposed amalgamation is part of the Vedanta Group’s scheme of amalgamation and arrangement, which envisages amalgamation of Sterlite Industries with SGL, vesting of the power business undertaking of MALCO into VAL, amalgamation of MALCO into SGL, amalgamation of Sterlite Energy Limited (SEL) into SGL and demerger of aluminium business undertaking of VAL into SGL.
According to Sterlite Industries, the restructuring is expected to simplify the group structure and make it more transparent by eliminating cross holdings. The re-organization will consolidate and simplify the group’s structures, will eliminate cross holdings within the group, will enhance in earnings and cash flow visibility, improved alignment of debt and cash flows and synergies arising out of the consolidation of the business.
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