Sesa Goa Ltd, part of the London-listed Vedanta Group, has acquired the assets of rival mining group Dempo in Goa for Rs1750 crore ($368 million) to boost its output of iron ore.
The acquisition gives Sesa Goa access to Dempo's mining leases, rights and infrastructure, the company said in a statement issued late on Thursday.
Sesa Goa has acquired all the outstanding common shares of V S Dempo & Co Private Limited, which in turn also holds 100 per cent equity shares of Dempo Mining Corporation Private Limited and 50 per cent equity shares of Goa Maritime Private Limited for a total consideration of Rs1,750 crore, on a debt-free and cash-free basis, and includes working capital of Rs145 crore,'' the company stated.
''The board of directors, at their meeting on Thursday, approved preferential offer to promoters and / associates, in terms of SEBI (Disclosure and Investor Protection) Guidelines, 2000, subject to approval of shareholders under section 81 (1A) of the Companies Act, 1956, at the extraordinary general meeting of the company to be held on 9 July 2009,'' the statement added.
The board of directors of Sesa Goa, at their meeting held on 20 April 2009, had approved its unaudited financial results for the quarter and audited financial results for the year ended 31 March 2009.
Sesa Goa is one of India's largest iron ore producers and exported the majority of its 12 million tonnes production in 2007-08. In fiscal year 2008-09 year ended on 31 March, Dempo produced 3.94 million tonnes of iron ore.
The company said the acquisition would be funded from its existing cash resources, which at the end of March stood at Rs4,143 crore.
Sesa Goa, which had earlier said it was eyeing mining assets in India and overseas, decided to sell them off following a fall in iron ore prices this year on the back of lower steel demand.