All merger approvals received except from RBI: Cairn-Vedanta
Mumbai : Natural resources major Vedanta Ltd. said on Tuesday it has received all approvals for its merger with subsidiary energy firm Cairn India, except the RBI's permission for issuing redeemable preference shares to the non-resident shareholders of Cairn.
"The company has now received all the required approvals in relation to the Scheme of Arrangement between Vedanta Ltd. and Cairn India Ltd., and their respective shareholders and creditors (Scheme) save and except the approval of Reserve Bank of India for issuance of redeemable preference shares to the non-resident shareholders of Cairn India," a Vedanta Ltd. and Cairn India joint statement said.
"The Scheme will be made effective upon receipt of the said approval of the Reserve Bank of India," it said.
Vedanta said on Monday that its board will meet on March 30 to consider payment of interim dividend to shareholders of Cairn India following the merger of the oil and gas major with itself.
"In view of the National Company Law Tribunal order approving the merger scheme, the board will also consider payment of said interim dividend to the shareholders of Cairn India Ltd, who will become shareholders of the company pursuant to the Scheme of Arrangement between Cairn India Ltd and the company," Vedanta said in a stock exchange filing.
Shareholders of both Vedanta Ltd. and Cairn India had in separate meetings held last year approved the merger.
Under the merger scheme, a Cairn India shareholder will get one Vedanta equity share and 7.5 preference shares for every Cairn India share.
State-run Life Insurance Corp. (LIC), as the single-largest domestic minority shareholder, owns 9.06 per cent in Cairn India and 3.9 per cent stake in Vedanta.
The Anil Agarwal led-Vedanta Ltd. received approvals in September 2016 from both the Bombay Stock Exchange and the NSE on the company's proposal to merge with 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 per cent in it through its various units.