Diversified mining, oil and gas group Vedanta Resources (VED) is to invest $158m to gain a controlling stake in Japanese LCD glass substrate manufacturer ASI.
It will invest $151m in existing ASI debt with face value of c$299m from banks. It will obtain just over 51% of ASI’s equity for a nominal consideration from the Carlyle Group. It will also provide a $7m loan to ASI.
The acquisition is conditional on consents being obtained from ASI's existing lenders and is expected to occur prior to 31 December 2017.
Glass substrate is made of silicon and metallic oxides including aluminium oxides.
Vedanta has a strategy to provide basic materials for the development of India and other emerging markets. The ASI transaction gives the mining group optionality to the growing market of materials for technology applications.
The FTSE 250 group says ASI has a particular focus on supplying glass substrate to small and medium sized thin film transistor LCD panels, used in many mobile devices, and that India has ‘significant market potential’ for such devices.
ASI made $169m revenue and $75m EBITDA (earnings before interest, tax, depreciation and amortisation) in the year to 31 March 2017. It had $625m of gross assets.
The company’s glass substrates have widespread applications beyond mobile phone screens. They are also used for satnav systems, cameras, flat screen TVs, tablets and laptops.
Vedanta is best known as a producer of aluminium, copper, zinc, lead, silver, iron ore, oil and gas and commercial energy. It has operations in India, Zambia, Namibia, South Africa, Ireland and Australia.
