Vedanta Resources Plc. subsidiary Sesa Goa Ltd has acquired the remaining 49 per cent stake in Liberia-based iron ore firm Western Cluster Ltd (WCL) for $33.5 million in cash, as per a filing on the Bombay Stock Exchange.
Post transaction, Western Cluster will become a wholly owned subsidiary of Sesa Goa.
In August, 2011, the firm had acquired 51 per cent stake in Western Cluster for $90 million.
Compared with the initial stake buying price, the company is now buying the stake at more than 50 per cent discount.
The WCL acquisition is expected to boost Sesa’s existing iron ore business project. The firm had completed over 42,000 meters of drilling till last month and the project is on track for first shipment in FY2014.
WCL was a wholly owned subsidiary of Elenilto Minerals & Mining LLC., when Sesa Goa first purchased the stake. Elenilto operates large-scale iron ore, gold, copper and other minerals exploration and mining activities in Africa and Europe. Elenilto has more than 100 exploration and mining licences, with over 10,000 sq km area in Africa and Europe.
Sesa Goa is India’s largest producer and exporter of iron ore in the private sector. The company is a majority owned subsidiary of Vedanta Resources Plc., the London-listed FTSE 100 diversified metals and mining major.
Sesa Goa has mining operations in Goa and Karnataka, while it also operates a 280,000 tonnes per year (TPY) metallurgical coke plant and a 250,000 TPY pig iron plant in Goa.
In 2011, the firm had acquired stake in two other companies including Goa Energy Pvt Ltd and Bellary Steels & Alloys Ltd. Prior to this in 2009, it had acquired stake in VS Dempo & Co Pvt Ltd.
Shares of Sesa Goa were trading down 2.23 per cent at Rs 194.90 in a weak Mumbai market at 3.22 PM on the Bombay Stock Exchange.
(Edited by Prem Udayabhanu)