Sesa Goa buys Dempo mining firm
Sesa Goa, India’s largest exporter of iron ore in the private sector, has acquired the Dempo group’s mining assets in Goa in a cash deal worth Rs 1,750 crore.
The transfer of V S Dempo & Co Private Ltd (VSD) to Sesa will see Dempo’s exit from the iron ore mining business in Goa after a fifty year run with an eye on expanding into global mining interests.
The Dempo Group’s assets being transferred to Sesa include mining leases, mining rights and related infrastructure in Goa. Dempo will retain both its corporate brand name and corporate logo. VSD, the company being transferred, has 19 mining leases, 13 of which are operational.
The company had sales of 4.36 million tonnes in 2008-09 as against 3.85 million tonnes the previous year and reported revenues of Rs 976 crore.
Srinivas V Dempo, Chairman and Managing Director of Dempo said it was prudent for his company to monetise its assets at this point in order to focus on larger mining assets within the country and overseas. “We are looking at a larger resource base out of India and are waiting for the detailed feasibility and technical studies,” he told reporters.
The infusion of funds would serve to expand the company’s other businesses including shipbuilding, food products and media, Dempo said. The company has mining leases in the Sindhdurga, Maharashtra.
The share purchase agreement gives Sesa Goa Ltd, a majority owned subsidiary of Vedanta Resources, all the outstanding common shares of V S Dempo & Co Pvt Ltd (VSD) which in turn holds 100 per cent equity shares of Dempo Mining Corporation Pvt Ltd and 50 pc equity of Goa Maritime Pvt Ltd.
The transaction has been funded by Sesa from its existing cash resources.