London: Shareholders of Vedanta Resources have given their nod to sweeten its offer of Rs 17,275 crore by up to 25 percent for buying out remaining stakes of Indian government in Hindustan Zinc and Balco.
With the approval, the London Stock Exchange-listed mining group now has the leeway to raise its offer to a total of Rs 21,635 crore for gaining 100 percent control in the erstwhile public sector firms.
In a filing to the LSE, Vedanta said 92.28 percent of shareholders voted in favour of the proposals, while 7.72 percent votes were casted against it.
The approval will remain valid till August 9, 2013.
The government, which currently holds 29.5 percent stake in Hindustan Zinc Ltd (HZL) and 49 percent stake in Balco, had sold its majority stake in the two firms to Vedanta during 2001 to 2003.
A company spokesperson had said last week the permissions sought from the shareholders are just the "enabling provisions" and no new offer has been made to the government yet.
The mining group, in January, had offered Rs 15,493 crore for buying 29.5 percent in HZL, and Rs 1,782 crore for 49 percent residual holding in Balco.
After shareholders approval, the Vedanta Board now has the power to raise the offer price up to Rs 18,606.10 crore (USD 3.378 billion) for HZL as the company had sought an increase of up to 15 percent over the January price.
For Balco, the company board can now raise the offer to a maximum of Rs 3,028.78 crore (USD 550 million), which is 62.72 percent increase over the January offer of USD 338 million (about Rs 1,782 crore).
Taken together, it becomes 19.92 percent increase in the offer price of January in US dollar terms. The offer gets sweetened by 25.24 percent in rupee terms at Vedanta's dollar-rupee exchange rate of 55.0688 (August 7).
In its notice to the shareholders, the Anil Agarwal-led firm had said that acquisition of remaining stakes in HZL and Balco are not linked to each other and cautioned that there is no certainty about the timeline of the transactions as the government has not yet accepted its offers.
Mines Secretary Vishwapati Trivedi had said last week that the government has not received any fresh offer from Vedanta and the Cabinet Committee on Economic Affairs would take a call on the matter.
J P Morgan Cazenove is advising Vedanta on the two transactions.
PTI
