Vedanta Resources Regulatory News (VED)

S. No.

Details required

Information of such event

a)

Name of the target entity, details in brief such as size, turnover etc.

Electrosteel Steels Limited ("ESL") is a company in the business of manufacturing of steel with a total current capacity of 1.5 million tonnes per annual (MTPA) and there is potential to increase the capacity to 2.5 MTPA. ESL has its manufacturing facilities near Bokaro, Jharkhand, India.

The total income of ESL for FY 2017 was INR 2,867.83 crores.

b)

Whether the acquisition would fall within related party transaction(s) and whether the promoter/ promoter group/ group companies have any interest in the entity being acquired? If yes, nature of interest and details thereof and whether the same is done at "arms length"

No

c)

industry to which the entity being acquired belongs;

Manufacturing of Steel

d)

objects and effects of acquisition (including but not limited to, disclosure of reasons for acquisition of target entity, if its business is outside the main line of business of the listed entity);

The acquisition will complement the Company's existing Iron Ore Business as the vertical integration of steel manufacturing capabilities has the potential to generate significant efficiencies.

e)

brief details of any governmental or regulatory approvals required for the acquisition;

All requisite approvals like approval from the National Company Law Tribunal and Competition Commission of India have been received.

f)

indicative time period for completion of the acquisition;

The Company has initiated implementation of the Resolution Plan. The upfront amount has been deposited in the escrow account of ESL and a new board of directors has been put in place.

g)

nature of consideration - whether cash consideration or share swap and details of the same;

The Consideration is in form of cash which has been deposited in an escrow account and thereby management control of ESL has been taken by the Company.

h)

cost of acquisition or the price at which the shares are acquired;

The Company has deposited the upfront amount of INR 5,320 crore in escrow account of ESL and the Company will hold 90% of the paid up capital of ESL.

i)

percentage of shareholding / control acquired and / or number of shares acquired;

The Company has acquired management control and as per approved Resolution Plan the Company will hold 90% of the paid up capital of ESL

j)

brief background about the entity acquired in terms of products/line of business acquired, date of incorporation, history of last 3 years turnover, country in which the acquired entity has presence and any other significant information (in brief);

ESL was incorporated in Ranchi, Jharkhand, India as a public company on December 20, 2006 and has been listed on the Bombay Stock Exchange and National Stock Exchange of India since 2010. Electrosteel owns and operates a greenfield integrated steel manufacturing facility near Bokaro, Jharkhand, India, which has a current capacity of 1.5 MTPA and the potential to increase to 2.5 MTPA.

ESL was admitted under Corporate insolvency resolution process in terms of the Insolvency and Bankruptcy Code, 2016 ("IBC") and the insolvency proceedings were commenced against ESL pursuant to the order dated July 21, 2017 passed by the Hon'ble National Company Law Tribunal, Kolkata Bench ("NCLT"). The NCLT, vide its order dated April 17, 2018 under Section 31(1) of the IBC, approved the Resolution Plan submitted by the Company for ESL under the ongoing corporate insolvency resolution process filed by the State Bank of India. The NCLT vide its Order dated April 17, 2018, had approved the Resolution Plan submitted by the Company for acquiring the controlling stake of ESL.

ESL's revenues (Total Income) of last three consecutive year are as below:

− FY 2016-17 Revenues: INR 2,867.83 crore

− FY 2015-16 Revenues: INR 2,904.47 crore

− FY 2014-15 Revenues: INR 1,846.85 crore

S. No.

Details required

Information of such event

a)

name(s) of parties with whom the agreement is entered

The Company, ESL, VSL, and State Bank of India

b)

purpose of entering into the agreement

The Escrow Agreement is executed for payment of upfront payment as required under the NCLAT Order to the financial creditors of ESL on completion of the Resolution Plan

c)

shareholding, if any, in the entity with whom the agreement is executed

NIL

d)

significant terms of the agreement (in brief) special rights like right to appoint directors, first right to share subscription in case of issuance of shares, right to restrict any change in capital structure etc.

To record the terms on which the Escrow Amount will be credited into the Escrow Account and the manner in which such amounts will be utilised.

e)

whether, the said parties are related to promoter/promoter group/ group companies in any manner. If yes, nature of relationship

No

f)

whether the transaction would fall within related party transactions?

No

g)

in case of issuance of shares to the parties, details of issue price, class of shares issued

-

h)

any other disclosures related to such agreements, viz., details of nominee on the board of directors of the listed entity, potential conflict of interest arising out of such agreements, etc

-

Communications

Finsbury

Arun Arora

Head, Corporate Communications

Tel: +91 124 459 3000

gc@vedanta.co.in

Daniela Fleischmann

Tel: +44 20 7251 3801

Investors

Rashmi Mohanty

Director - Investor Relations

Sunila Martis

Associate General Manager - Investor Relations

Veena Sankaran

Manager - Investor Relations

Tel: +44 20 7659 4732

Tel: +91 22 6646 1531

ir@vedanta.co.in