Vedanta, Cairn India and Vedanta Resources Plc today announced a merger between Vedanta and Cairn India.
Merger of Cairn India into Vedanta will take through a Scheme of Amalgamation under Indian Law. The minority shareholders of Cairn India will receive for one equity share held; one equity share (Face Value: Re 1)in Vedanta and one 7.5% Redeemable Preference Share (RPS) (Face Value: Rs 10).
No shares will be issued to Vedanta or any of its subsidiaries for their shareholding in Cairn India. The transaction is expected to close in Q1 of CY 2016.
Anil Agarwal, chairman of Vedanta plc, said, ''The merger of Cairn India and Vedanta Limited consolidates our position as India’s leading diversified natural resources champion, uniquely positioned to support India’s economic growth. The independent Directors, at both Vedanta Limited 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.''
Tom Albanese, CEO of Vedanta, said, ''The combined entity is uniquely positioned to help unlock India’s wealth of world-class energy and mineral resources.''
Mayank Ashar, CEO of Cairn India, said, ''The merger with Vedanta Limited will generate additional value for our shareholders and derisks Cairn India by providing access to a portfolio of diversified Tier-I, low cost, long-life assets, to deliver significant near term growth. Our Rajasthan fields continue to remain our core asset. The financial strength of the enlarged group will ensure greater access to capital to further Indian oil & gas development.''
Following completion of transaction, Vandanta Plc ownership in Vedanta is expected to decrease to 20.1% from its cureent 62.9% shareholding. The minority shareholders of Cairn India and Vedanta Plc will hold 20.2% and 29.7% stake in the enlarged entity.
This merger will improve the ability to allocate capital to highest return projects across the portfolio. It will further contribute to streamline the internal processes and improve productivity.