Cairn India to merge with Vedanta Ltd
Metal and mining giant Vedanta Ltd and its subsidiary oil explorer Cairn India have announced to merge.
The merger will create India’s largest diversified natural resources company. It will also help Cairn spread its risk from volatile oil business to other metals and commodities.
Decision in this regard was taken by Independent directors of both the companies owned by billionaire Anil Agarwal.
The merger will be in an all share swap deal which will give the Vedanta Ltd access to Cairn India’s 2.7 billion dollars (Rs 16,867 crore) cash pile. Vedanta will use this cash lying with Cairn to pay off part of its 77,752 crore rupees debt
For the merger each minority shareholders of Cairn India will receive one equity share of Vedanta. They will also receive one redeemable preference share of Rs 10 face value with 7.5% annual dividend.
Previously Vedanta was known as Sesa Sterlite Ltd. In 2013 it had consolidated its iron ore mining business by merging Sesa Goa Ltd with Sterlite Industries (India) Ltd.
Month: Current Affairs - June, 2015