New Delhi, (IANS) A day after announcing the merger of two of his group companies – oil and gas exploration major Cairn India with natural resources arm Vedanta, Anil Agarwal met Finance Minister Arun Jaitley here on Monday to update him of the development.
“This is my regular visit to finance ministry. Whenever I come here, I appraise them of what is happening. We had told them about this is the merger in advance. We told them today also, updated them on the merger of Vedanta Ltd and Cairn India,” Agarwal, who is looking to get support of minority shareholder LIC, told reporters following the meeting.
The merger would fail if state-run Life Insurance Corp, which holds 9.06 percent stake in Cairn India, along with Britain’s Cairn Energy, which has 9.82 percent interest, were to vote against it.
Agarwal said that in keeping with the global corporate trends, Vedanta is trying to create a natural resource company in India that will produce resources like oil and gas, aluminium, copper, zinc and iron ore.
Merging Cairn India with itself would provide Vedanta access to the oil explorer’s cash and help reduce its debt burden. At the end of March, Vedanta had total liabilities worth over Rs.99,000 crore on a consolidated basis.
Cairn shareholders will get one equity and one redeemable preference share of Vedanta, while the transaction is intended to be completed by the first quarter of 2016, the group said.
“The merger of Cairn India and Vedanta Ltd consolidates our position as India’s leading diversified natural resources champion, uniquely positioned to support India’s economic growth,” Agarwal said on Sunday.
Vedanta itself was created with the merger of Sesa Goa, Sterlite and Vedanta Aluminium.