Issuer |
Sterlite Industries (India) Limited, a limited liability company incorporated under the laws of the Republic of India | |
Ticker / Exchange |
SLT / New York Stock Exchange | |
Last sale price of ADSs on
October 15, 2009 |
$16.62 | |
| The Notes Offering | ||
Securities offered |
$500,000,000 aggregate principal amount of 4.00% Convertible Senior Notes due 2014 | |
Maturity date |
October 30, 2014, unless earlier repurchased or redeemed by us or converted | |
Annual interest rate |
4.00% per year | |
Interest payment dates |
April 30 and October 30 of each year, beginning on April 30, 2010, to the holders of record at 5:00 p.m., New York City time, on the preceding April 15 and October 15, respectively | |
Optional Redemption |
Subject to certain exceptions, at any time after November 4, 2012, we may redeem all or part of the notes at a price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest, including additional interest, if any, on such notes to, but excluding the redemption date, if the closing price of our ADSs has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which we provide notice of such redemption. | |
Conversion price |
Approximately $23.33 per ADS | |
Conversion rate (subject
to adjustment) |
42.8688 ADSs per $1,000 principal amount of notes | |
Increase to conversion
rate upon change of
control (subject to
adjustment)
|
If and only to the extent a holder converts its notes in connection with a change of control (as defined in the Preliminary Prospectus Supplement relating to the notes under “Description of the Notes—Fundamental Change Permits Purchase of Notes By Us at the Option of the Holder”) pursuant to which 10% or more of the consideration for our equity shares and/or ADSs (other than cash payments for fractional equity shares and cash payments made in respect of dissenters’ appraisal rights) in such change of control transaction consists of cash or securities (or other property) that are not ordinary shares, shares of common stock, depositary receipts or other certificates representing common equity interests traded or scheduled to be traded immediately following such change of control transaction on a U.S. national securities exchange, the Issuer will increase the conversion rate by a number of additional ADSs that will be determined by reference to the following table. |
| Effective Date | ||||||||||||||||||||||||
| ADS Price on | October 30, | October30, | October 30, | October 30, | October 30, | |||||||||||||||||||
| Effective Date | October 15, 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | ||||||||||||||||||
$16.97 |
16.0757 | 16.0757 | 16.0757 | 16.0757 | 16.0757 | 16.0757 | ||||||||||||||||||
$17.50 |
15.0756 | 14.9830 | 14.9472 | 15.0445 | 14.6610 | 14.2741 | ||||||||||||||||||
$18.00 |
14.2137 | 14.0393 | 13.8944 | 13.8881 | 13.3855 | 12.6868 | ||||||||||||||||||
$19.00 |
12.6782 | 12.3610 | 12.0167 | 11.8200 | 11.1337 | 9.7628 | ||||||||||||||||||
$20.00 |
11.3564 | 10.9208 | 10.4045 | 10.0307 | 9.2300 | 7.1312 | ||||||||||||||||||
$22.50 |
8.7743 | 8.1311 | 7.2893 | 6.4836 | 5.6482 | 1.5756 | ||||||||||||||||||
$25.00 |
6.9336 | 6.1781 | 5.1459 | 3.8627 | 3.2331 | 0.0000 | ||||||||||||||||||
$30.00 |
4.5939 | 3.7883 | 2.6618 | 0.2392 | 0.1585 | 0.0000 | ||||||||||||||||||
$35.00 |
3.2548 | 2.5103 | 1.4996 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||
$40.00 |
2.4344 | 1.7872 | 0.9516 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||
$45.00 |
1.9000 | 1.3510 | 0.6776 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||
$50.00 |
1.5326 | 1.0699 | 0.5294 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||
$60.00 |
1.0669 | 0.7383 | 0.3729 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||
$80.00 |
0.5946 | 0.4176 | 0.2212 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||
| If the ADS price exceeds $80.00 per ADS or is less than $16.97 per ADS (in each case, subject to adjustment), the conversion rate will not be increased. In no event (i) will the total number of ADSs issuable upon conversion exceed 58.9445 per $1,000 principal amount of the notes, subject to adjustment in the same manner as the conversion rate; (ii) the conversion rate as adjusted in accordance with the foregoing exceed a conversion rate (the “conversion rate limit”) per US$1,000 principal amount of notes that is equivalent to a conversion price of US$17.50 per ADS, which is the minimum conversion price per ADS as determined pursuant to the regulations prescribed by the Ministry of Finance and has been determined based on the Rs.803.29 minimum conversion price and the RBI exchange rate of Rs.45.91 to US$1.00; or (iii) the conversion rate be adjusted to a rate that would render conversion of the notes into ADSs at such adjusted conversion rate to be in contravention of applicable law or subject to approval of the Ministry of Finance, or the MoF, the RBI or any other regulatory or governmental authority in India. | |||
Issue price |
100% | ||
Net proceeds (estimated) |
Our net proceeds from the sale of notes in this offering will total approximately $495.1 million after deducting the underwriting discounts and commissions and estimated offering expenses which are payable by us. | ||
Underwriting discounts and
commissions per note
|
0.75% | ||
Underwriting discounts and
commissions |
$3,750,000 | ||
Notes CUSIP |
859737 AB4 | ||
Clearing |
The Depository Trust Company and its direct and indirect participants, including Clearstream Banking, S.A. Luxembourg and Euroclear Bank S.A./N.V. | ||
Pricing date |
October 15, 2009 | ||
Settlement date |
October 29, 2009 | ||
Underwriters |
Deutsche Bank Securities Inc. and Morgan Stanley & Co. Incorporated | ||
Other information |
Assuming conversion of all notes at the initial conversion ratio of 42.8688, we will have 861,834,822 equity shares outstanding. Also, assuming conversion of all notes at the initial conversion ratio of 42.8688, Vedanta, through Twin Star and MALCO, will continue to have effective control over 478,291,746 of our outstanding equity shares, which will represent 55.5% of our outstanding |
| share capital assuming such conversion, which equity shares will be subject to a 60-day “lock-up” period. | ||
| In July 2009, we issued a total of 131,906,011 equity shares underlying 131,906,011 ADSs in an underwritten public offering, or the ADS Offering. Giving effect to the ADS Offering, as of June 30, 2009, our (i) shareholder’s equity would have been $35.2 million representing 840,400,422 issued and outstanding equity shares , (ii) security premium would have been $3,846.2 million, (iii) total equity would have been $8,606.1 million and (iv) total capitalization would have been $9,205.0 million (or $9,705.0 million after giving effect to this offering). |
| Name | Principal Amount of Notes | |||
Deutsche Bank Securities Inc. |
$250,000,000 | |||
Morgan Stanley & Co. Incorporated |
$250,000,000 | |||
Total |
$500,000,000 | |||
| The expenses of the offering, not including the underwriting discount, are estimated to be $1.2 million in total. | ||
| Interest on the notes will be subject to Indian withholding tax, but the Issuer will pay additional amounts with respect to such Indian withholding tax so that the net payments under or with respect to the notes will be equal to the amount that would have been received without such withholding. Any capital gain recognized on the redemption of notes or the sale of ADSs or equity shares may be subject to Indian tax and generally will be treated as U.S. source gain for U.S. foreign tax credit purposes. As a result, the Indian tax may not be currently creditable for U.S. federal income tax purposes unless a U.S. investor has other foreign source income for the year in the appropriate U.S. foreign tax credit limitation basket. |