Vedanta makes aggressive pitch for Cairn merger, now offers 3 additional pref shares

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New Delhi: Unable to quickly absorb its cash-rich oil subsidiary Cairn India, mining billionaire Anil Agarwal’s Vedanta Ltd has sweetened the merger deal by offering three additional preference shares.

A man walks in front of the Vedanta office building in Mumbai
A man walks past the Vedanta office building in Mumbai August 16, 2010. India-focused miner Vedanta Resources said it will acquire 51-60 percent of Cairn India for about $8.5-9.6 billion in cash to be funded via debt and cash resources, a move that would represent Vedanta’s first foray into oil and gas, and help Edinburgh-based Cairn Energy fund an expensive drilling programme in Greenland. REUTERS/Danish Siddiqui (INDIA – Tags: BUSINESS ENERGY)

Agarwal had in June last year announced merger of Cairn India with parent Vedanta Ltd in a $2.3 billion all-share deal to create India’s largest diversified natural resources company.

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That time, it was announced that shareholders of Cairn India will get one ordinary share and 7.5 percent redeemable preference share of Vedanta Ltd with a face value of Rs 10.

Friday, the company announced that “each Cairn India minority shareholder will receive for each equity share held one equity share in Vedanta Ltd and four Redeemable Preference Shares with a face value of Rs 10 in Vedanta Ltd, with a coupon of 7.5 percent and tenure of 18 months from issuance.”

The new ratio, the company said, implied premium of 20 percent on one month Cairn India share price.

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