July 16, 2009 / 6:10 AM / 11 years ago

Sterlite raising £916 million in offering

MUMBAI (Reuters) - Indian metals producer Sterlite Industries STRL.BO said on Thursday it is raising about $1.5 billion (916 million pounds) in an issue of American Depositary Shares (ADS), with parent Vedanta VED.L to buy $500 million of the issue.

The proceeds would be used to develop its power generation business in India, capital expenditure and for planned acquisitions, it said in a statement.

The deal, arranged by JPMorgan (JPM.N) and Morgan Stanley (MS.N), was launched in the United States on Wednesday and was set to price shortly, a person familiar with the matter told Reuters.

The company said in its filing to the Securities Exchange Commission the price to the public per ADS would not be less than 591.50 rupees, or $12.14. Each ADS represents one equity share.

The underwriters to the issue have an over-allotment option equivalent to 15 percent of the offering size, the company said.

Sterlite’s ADS (SLT.N) closed at $12.94 on Wednesday, up 6.5 percent. Its Indian shares closed up 4.1 percent at 628.65 rupees on Wednesday in Mumbai.

Its unit Sterlite Energy is investing 82 billion rupees (1.03 billion pounds) to build a 2,400 megawatt thermal coal-based power facility in the eastern Indian state of Orissa. The project is expected to be commissioned in the third quarter of fiscal 2010, the company said in its filing.

The company is also expanding its aluminium business through Vedanta Aluminium, a unit of Vedanta Resources, it said.

Last month Sterlite had obtained shareholder approval to raise funds through issue of securities, including ADS.

Reporting by Tony Munroe, Janaki Krishnan, Narayanan Somasundaram & Nishant Kumar; Editing by Ranjit Gangadharan

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