Sterlite decides 1:1 share ratio for demerger

MUMBAI, APRIL 25. The board of Sterlite Industries (India) today accepted management consulting firm Arthur Andersen's recommendation of a 1:1 share ratio for demerger of its telecom business.

The boards of both Sterlite and Madras Aluminium Company have accepted valuation reports of Arthur Andersen and Ernst & Young for a 2:1 share exchange ratio for Malco's merger with Sterlite.

In the case of its telecom business, which Sterlite has decided to demerge into a separate company, all existing shareholders would receive one new fully paid-up equity share of Rs. 5 each in the new entity for every one fully paid-up equity share of Rs. 10 each held by them in Sterlite, the company said after the board meeting. After the demerger, the face value of Sterlite's equity share would be reduced to Rs. 5 per share.

Sterlite's equity capital comprises of 55.91 million equity shares of Rs. 10 each aggregating Rs. 55.91 crores and after the demerger it will comprise the same number of equity shares of Rs. 5 each amounting to Rs. 27.95 crores.

As per the scheme of amalgamation, all shareholders of Malco would receive one new fully paid-up equity share of Rs. 5 each of Sterlite (after demerger of telecom business) for every two fully paid-up equity shares of Rs. 10 each held by them in Malco.

The equity capital of Sterlite (metals business) would comprise 67.16 million equity shares of Rs. 5 each (inclusive of 11.25 million shares of Rs. 5 each to be allotted to the shareholders of Malco on merger) aggregating Rs. 33.58 crores.

- PTI

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Section  : Business
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