Vedanta buys Raykal Aluminium stake
Vedanta Aluminium (VAL) is to buy a 24.5% stake in Raykal Aluminium for Rs 1,811 crore, subject to conditions.
Raykal Aluminium holds prospecting licences for bauxite mines at Sijmali and Kurumali of Rayagad and Kalahandi districts of Odisha.
VAL will fully acquire Raykal Aluminium in phases, a filing made to US Securities and Exchange Commission (SEC) on May 31 by its sister firm Sterlite Industries showed.
As per the filing, the deal was signed on February 23 this year, two days before a group restructuring exercise was announced by its parent Vedanta Resources.
However, no announcement related to the deal has been made by VAL or Sterlite, which holds a 30% stake in VAL, to the Indian regulatory authorities.
Sterlite said that after this agreement, ‘entire bauxite excavated from the above mines will be available for the use of Raykal and/or to the company (VAL)’.
The acquisition would help Vedanta Aluminium to secure bauxite for its alumina refinery in Odisha's Lanjigarh, as the two mines are estimated to hold about 250-280Mt of reserves.
The mines are also close to VAL's site at Lanjigarh, where it operates a 1Mt/y alumina refinery.
The company has been struggling to meet the rising costs as it buys bauxite from the open market.