| Agarwal: United for now
Mumbai, Sept. 16: Sterlite Industries (India) Ltd today decided to bury its proposal to demerge its copper business.
Sources close to the Anil Agarwal-led company said the decision has been taken as Sterlite Industries’ “plans to raise resources in the international markets are now well advanced” and the market capitalisation of the company has increased.
The board today approved the withdrawal of scheme of arrangement for demerger of the copper business, the company said in a release here.
In late January, the company had approved a restructuring of its copper, power transmission equipment and aluminium conductor businesses.
The plan included transfer of the copper business and investments of Sterlite Industries to a new company.
While the copper business would be transferred as a going concern with effect from April 1, 2003, assets and liabilities of the copper business and investments would be transferred at their book values.
Under the scheme, the shareholders were entitled to one equity share of Rs 5 each in the new company for every share held in Sterlite Industries or a sum of Rs 175 for every share held in Sterlite Industries.
The restructuring process, however, entailed that Sterlite Industries would continue to hold the power transmission equipment and aluminium conductor businesses and other non-metal related assets.
However, the restructuring proposal came in for sharp criticism from analysts and a few minority shareholders. They said Sterlite Industries had preferred to demerge more than 90 per cent of its core businesses to another company and keep the non-core businesses as a listed entity instead of retaining the core businesses.
There were allegations that the company had not valued the businesses on the basis of earnings.