Vedanta Aluminium says losses are short-term

14/lug/2015 10:47:04 taiwan lutian steel co.,ltd Contatta l'autore

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As share prices of both Sesa Goa and Sterlite plummeted today, after Vedanta announced the merger of its loss-making entity Vedanta Aluminum Ltd (VAL) into the newly-formed company Sesa Sterlite, the Jharsuguda-based VAL said the losses were only short-term and linked to the fluctuation in metal prices.
"The losses that we incurred in the past few months were in tandem with international market trend, as world-wide metal prices collapsed in fear of uncertainty in European economy. But I think prices will revive in a couple of months,” Mukesh Kumar, chief operating officer of VAL told Business Standard.The aluminum prices on the benchmark London Metal Exchange (LME) closed at $2,327 a tonne on Monday, up from $2,087 quoted 10 days ago. Kumar said there is a possibility the rates will go up to $2,700-$2,800 levels. "Indian aluminium industry is the most feasible industry. People are unnecessarily creating rumours,” the VAL top officer said, reacting to share price fall.Sesa Goa shares shed 10 per cent and Sterlite prices tumbled over four per cent during intra-day trade on the Bombay Stock Exchange. Analysts said Sesa Goa suffered the most as investors felt the merger was negative for the minor shareholders of the iron ore miner.Vedanta has clarified that there will be a saving of Rs 1,000 crore a year in the book of Sesa Sterlite due to the accumulated loss of the VAL, which can be deducted from taxable profit. However, Sesa Sterlite will have to carry the $4 billion debt burden of the aluminum maker, post merger. Though the parent company, Vedanta Resources Plc, has hinted about minimising operational cost for Orissa plant in its half-yearly report last year, the VAL official refused to speak about the cost cutting measures.At its Lanjigarh plant in Kalahandi district, the VAL produces ingots, billets & wire rods from its 0.5 million tonne smelting plant by sourcing bauxite from Gujarat and other states. The company is yet to get bauxite from Orissa Mining Corporation, as the state has entered into a legal battle with the Union forest and environment ministry over mining in Niyamgiri Hills. The SC will start the final hearing process of the matter from April 9.


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