London– Mining major Vedanta Resources said on Tuesday that its shareholders have approved the merger of group companies Vedanta Ltd. and Cairn India.
“Vedanta Resources announces that at its general meeting held today (Tuesday), September 6, the resolution put to shareholders in relation to the proposed merger of Vedanta Ltd and Cairn India was duly passed on a poll,” the London-listed Vedanta Resources said in a stock exchange filing here.
Vedanta Ltd. will also hold a meeting of its shareholders, secured and unsecured creditors on Thursday to seek approval for the merger with Cairn India.
Cairn India has called a shareholders’ meeting on September 12, to seek approval for the company’s takeover by its parent under a revised all-share deal.
In the revised offer, the Anil Agarwal-led Vedanta group will give Cairn India minority shareholders one equity share and four redeemable-preference shares with a face value of Rs 10 each. The preference shares will carry a coupon of 7.5 per cent and a tenure of 18 months.
In July, Vedanta offered three additional preference shares towards winning over minority shareholders like state-run Life Insurance Corp (LIC).
Energy firm Cairn India announced in July it was working to merge with its parent, Vedanta Resources at a time when key shareholder LIC is yet to give its assent to the merger.
“Your company continues to work towards completion of merger with Vedanta,” Cairn India chairman Navin Agarwal told shareholders at the company’s 10th annual general meeting in Mumbai.
“Your company will get access to Vedanta’s tier-one metal and mining assets, which are well-invested, low cost and have a long life,” he said.
Under the proposed merger, a Cairn India shareholder will get one Vedanta equity share and 7.5 preference shares for every Cairn India share.
LIC, as the single largest domestic minority shareholder, owns 9.06 per cent in Cairn India and 3.9 per cent stake in Vedanta.
Vedanta Ltd. received approvals last September from both the Bombay Stock Exchange and the NSE on the company’s proposal to merge with its hydrocarbons subsidiary Cairn India.
Merging Cairn India with itself would provide Vedanta access to the oil explorer’s cash and help reduce its debt burden. 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. (IANS)