Business
Cairn India to merge with Vedanta
New Delhi, June 14
Industrialist Anil Agarwal
on Sunday announced the merger of two of his group companies -- the oil
and gas exploration major Cairn India with the natural resources arm
Vedanta Ltd. Cairn shareholders will get one equity and one redeemable
preference share of Vedanta.
The transaction is intended to be completed by the first quarter of 2016, the group said.
"The
merger of Cairn India and Vedanta Ltd consolidates our position as
India's leading diversified natural resources champion, uniquely
positioned to support India's economic growth," Vedanta chairman Agarwal
said.
"The independent directors, at both Vedanta and Cairn
India, unanimously recommend the proposed combination. This marks a
significant step towards achieving our stated long-term vision of a
simplified group structure with alignment of interests between all
shareholders for the creation of long-term sustainable value."
The
group, in a filing with stock exchanges on Sunday, said the strategy
remains unchanged to continue focus on delivering attractive growth,
sustainable development, long-term value for shareholders and to sustain
strong dividend distribution.
"Approximately 752 million each of
equity shares and redeemable preference shares will be issued to the
minority shareholders of Cairn India by Vedanta Limited pursuant to the
merger," it said, adding: "No shares will be issued to Vedanta Limited
or any of its subsidiaries for their shareholding in Cairn India."
Vedanta Limited itself was created with the merger of Sesa Goa, Sterlite and Vedanta Aluminium.
Cairn
said on Saturday in a stock exchange filing: "A meeting of Board of
Directors of the company will be held on June 14, 2015, inter alia, to
consider and evaluate amalgamation of the company with Vedanta Limited."
Vedanta took majority control of Cairn India for $8.67 billion
in 2011 and holds 59.9 percent in the latter through its various units.
Merging
Cairn India with itself would provide Vedanta access to the oil
explorer's cash and help reduce its debt burden. At the end of March
this year, Vedanta had total liabilities worth over Rs.99,000 crore on a
consolidated basis.
The Anil Agarwal-led Vedanta earlier this
month hiked stake in its oil and gas exploration subsidiary Cairn India
by nearly five percent for $315 million from a wholly-owned subsidiary
-- Twinstar Mauritius Holdings (TSMHL).