The planned merger of Sesa Goa and Sterlite Industries is facing opposition from Templeton Asset Management Ltd, which holds a 13 per cent stake in Sesa Goa Ltd, an Economic Times report citing unnamed sources said.
The report said Templeton is trying to muster support of other shareholders to block the merger of the two Vedanta Resource companies.
Templeton, the second largest shareholder in Sesa Goa, is in talks with institutional investors in Sesa Goa to block the merger, according to the report.
Templeton, the report said, is worried about the huge debt burden of Sterlite and has concerns about another aluminium unit of Sterlite.
Templeton, however, would need over 25 per cent of the votes to block the resolution.
"Templeton, not all shareholders have issues. We have always ensured that the interests of all shareholders are protected and the merger will only enhance the medium and long-term value of their investments," the paper quoted an email reply from Sesa Goa as saying.
Templeton's move comes ahead of the shareholders' meeting called by Sesa Goa on 19 June to approve the merger.
A merger of the Indian subsidiaries would simplify the business structure in India for Vedanta Resources and cut costs. Vedanta also had plans for an American Depository Receipts issue on the merged entity.