LSE-listed Vedanta Resources’ group firm Vedanta Aluminium (VAL) has struck a deal to acquire Raykal Aluminium Company Private Ltd (Raykal) from diversified conglomerate Larsen & Toubro (L&T) for Rs 1,811 crore ($330 million) over a period of time in a milestone-based acquisition, the company has disclosed.
In the first leg of the deal, it has acquired 24.5 per cent of Raykal for Rs 200.7 crore ($36 million).
This follows a deal struck in February wherein VAL entered into a tripartite agreement with L&T and Raykal. L&T holds certain prospecting licenses for bauxite mines located at Sijmali and Kurumali of Rayagad and Kalahandi districts of Orissa. By this agreement the entire bauxite excavated from above mines will be available for the use of Raykal and/or Vedanta Aluminium.
Bauxite is a key raw material used for alumina production. The mines would feed the alumina plant of VAL in the state.
Incorporated in 2001, VAL is a producer of metallurgical grade alumina and other aluminium products, which cater to a wide spectrum of industries.
The firm operates 1 mtpa greenfield alumina refinery and an associated 75 MW captive power plant at Lanjigarh in the state of Orissa. It is increasing the capacity of the Lanjigarh refinery to 5 mtpa.
It has also invested in a 0.5 mtpa aluminum smelter and 1,215 MW captive power plant at Jharsuguda, Orissa. As per its website, it is also constructing 1.1 mtpa aluminium smelter expansion project at Jharsuguda.
Jharsuguda is also the site of 2,400 MW independent power plant being set up by group company Sterlite Energy Ltd.
For Vedanta Resources group, this deal comes as yet another big ticket acquisition in the country. The metal & mining firm which has diversified into oil business among other areas has struck multi-billion dollar deal for Cairn India and has also expanded in the mining field by snapping Sesa Goa few years ago.