Last Updated :
09 March 2009 at 11:25 IST
Sterlite shrinks by 2.5% on acquisition fallout
Commodity OnlineMUMBAI: The Vedanta Resources group company, Sterlite Industries Ltd fell by over 2% in the early trading hour on the Bombay Stock Exchange (BSE) today, after the company’s announcement on Saturday to acquire the bankrupt US copper miner Asarco LCC at USD 1.7 billion.
The company had agreed to pay USD 1.1billion in cash and remaining 600 million dollars will be paid in the form of a promissory note, payable over a period nine-years.
During last October, Sterlite had taken a back foot on a USD 2.6 billion deal to buy Asarco, saying it would require substantial reduction in price, since the copper market was down.
Copper prices have fallen by about 60 percent since a record USD 8940 in July 2008. In the international markets, copper Futures ended at USD 3723 per tonnes on Friday, while copper prices remained weak on MCX at Rs.189.95 per kg for April contract against the spot price of Rs.191.8 per kg.
Enter Currency Trading Contest now. Win $ 25,000Sterlite Industries India was down 0.92% to Rs 247.75 at 9:58 IST on BSE, having recovered from the session's low of Rs 245, on acquisition of Asarco LLC, the US-based bankrupt copper miner for $1.7 billion, 35% lower than its previous bid.
The stock had touched a 52-week high of Rs.954.80 on 2 June 2008 and a 52-week low of Rs.164.50 on 27 October 2008. Today the stock hit a high of Rs.254 during the day, while was trading at its intra-day low levels of Rs. 244.65 down by over 2.5%.
Meanwhile, Sensex was trading at its day’s low of 8209.77 down by 116.05 points or 1.30% from its Friday close.
Asarco has three copper mines in Arizona, from which it had sold 237,000 tonnes of refined copper during 2008 and according to estimates; its mines have reserves of 5 million tonnes of contained copper at present. The deal would allow the US miner to exit bankruptcy after seeking court protection from creditors.
According to the experts, the deal was fairly valued. According to them, once the commodity markets would start recovering, the company would be able to reap benefits out of it.
NCDEX SOYBEANINDOREJUN12 20 June 2012
contract was trading at
Rs 0 . What's your view on it?
After reading this article, people also read:
