In the revised offer, Vedanta will give minority shareholders of Cairn India one equity share and four redeemable-preference shares with a face value of Rs 10 each.
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Oil and gas giant Cairn India said on Monday that its shareholders had approved a merger with Vedanta Limited, the country’s biggest producer of aluminium and copper.
In the post-ballot voting, the company said, “The scheme has also been approved by a majority of the minority shareholders”.
“Public shareholders of the company have cast 99.98 per cent of votes (in value) in favour of the resolution”.
The deal will go through if LIC votes in favour of the deal, a source said.
Vedanta Resources paid more than $8 billion to UK-based energy giant Cairn in 2011 for a majority stake in Cairn India. The merger with Vedanta is expected by the end of this fiscal year, Cairn India said in a statement.
Requiring support of at least half of the 40.12 per cent minority shareholders of Cairn India, the deal got support of 72.43 per cent of the minority votes, the company said in a regulatory filing. Earlier this week, shareholders of Vedanta Resources, the parent firm of Vedanta Ltd, had approved the merger.
Vedanta held a court convened shareholder meeting in Goa on Thursday on the proposed merger, according to reports.
However, the real test for Agarwal is next week, on September 12, when Cairn India has called a shareholders’ meeting to seek approval for the company’s takeover by its parent under a revised all-share deal. The preference shares will carry a coupon of 7.5 per cent and a tenure of 18 months. The merger, however, could not be completed due to opposition from minority investors such as Life Insurance Corp. of India (LIC). On 31st August, Business Standard reported, Proxy advisory firms Stakeholders’ Empowerment Services (SES) and Institutional Investor Advisory Services (IiAS) have given opposite recommendations to the shareholders of Vedanta on its proposed merger with Cairn India.
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 in September, 2016 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.
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Anil Agarwal’s Vedanta Group had in 2011 acquired Cairn India from its British promoters, Cairn Energy, and a year ago proposed to merge the cash-rich firm with BSE-listed Vedanta.
