Vedanta, Cairn India announce revised terms for the merger

The pro-forma ownership in Vedanta Ltd will now be where Vedanta Ltd shareholders have 79.8% and Cairn India shareholders own 20.2%.

Vedanta and Cairn India agree to revise merger. Photo: Reuters

Vedanta Ltd, Cairn India and Vedanta Resources plc (“Vedanta plc” together with its subsidiaries, the “Group”), on Friday announced a revised and final terms to the recommended merger between Vedanta Limited and Cairn India (the “Transaction”). The merger was first announced on 14 June 2015.

The pro-forma ownership in Vedanta Ltd will now be where Vedanta Ltd shareholders have 79.8% and Cairn India shareholders own 20.2%. Vedanta plc pro-forma will have ownership of 50.1% in Vedanta Ltd.

It was previously announced, Vedanta plc ownership in Vedanta Ltd is expected to decrease to 50.1% from its current 62.9% shareholding. Cairn India minority shareholders will own 20.2% and Vedanta Ltd minority shareholders will own a 29.7% stake in the enlarged entity.

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The Boards of Vedanta and Cairn India have today approved the revised and final terms for the transaction, taking into account prevailing market conditions and having regard to underlying commercial factors, said the companies in release.

The revised and final terms include each of Cairn India minority shareholder will receive for each equity share held 1 equity share in Vedanta Ltd and in addition 4 Redeemable Preference Shares with a face value of Rs 10 in Vedanta Ltd, with a coupon of 7.5% and tenure of 18 months from issuance. Implied premium of 20% to one month VWAP of Cairn India share price.

It further said that the Jurisdictional High Courts have convened the shareholder meetings for each of Vedanta Ltd and Cairn India on 8 September 2016 and 12 September 2016, respectively. The Notice convening the shareholder meetings will be sent to shareholders in due course.

Anil Agarwal, Chairman of Vedanta Resources plc, said, “I am pleased that the Boards of Cairn India and Vedanta Ltd have approved the terms announced today. The simplified corporate structure will better align interests between all shareholders for the creation of long term sustainable value.”

Sudhir Mathur, CFO and Acting CEO of Cairn India, said, “Cairn India shareholders will benefit from exposure to a diversified portfolio of world-class, low cost, long-life assets with significant growth. We are confident that the financial strength and diversified portfolio of Tier-I assets will provide de-risked earnings and stable cash flows, driving long-term value. Cairn India shareholders will benefit from the revised terms announced today, while retaining the upside from Cairn’s strong oil & gas assets.”

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