Cairn India shareholders on Monday approved the merger of the company with its parent Vedanta after Life Insurance Corporation (LIC) and Cairn Energy of UK voted in favour of the sweetened merger ratio.
The deal got support of 72.43% of the minority votes, the company said in a regulatory filing. It required the support of at least half of the 40.12% minority shareholders of Cairn India,
LIC holds 9.06% stake in Cairn India while Cairn Energy has 9.82%. But of their support the deal could not have mustered the requisite majority support of minority shareholders.
“The scheme has been approved by a majority of the minority shareholders,” the filing said adding together with promoter, the deal got support of 92.86% of shareholders in terms of value.
Vedanta Group chairman Anil Agarwal said India should focus on resources below the ground to cut its imports and boost employment. “We are 85% dependent on imports for our oil needs and 100% for gold and copper. We have resources and it is time that we focus on exploiting them,” he said adding the merger was aimed at creating a firm that will help monetise them.
Vedanta shareholders had last week approved the merger under a revised all-share deal. In a bid to salvage the merger of cash-rich oil firm Cairn India with its debt-laden parent Vedanta, the group had in July sweetened the deal by offering three additional preference shares in hope of winning over minority shareholders such as LIC.
{{/usCountry}}Vedanta shareholders had last week approved the merger under a revised all-share deal. In a bid to salvage the merger of cash-rich oil firm Cairn India with its debt-laden parent Vedanta, the group had in July sweetened the deal by offering three additional preference shares in hope of winning over minority shareholders such as LIC.
{{/usCountry}}Through the merger, Agarwal is looking to create India’s largest diversified natural resources firm, which could compete with BHP Billiton Ltd and Vale SA.
Vedanta is said to be wanting to use ₹23,290 crore cash lying with Cairn to pay off part of its Rs 77,952 crore debt. It had in May rolled over a controversial $1.25-billion (Rs 8,375 crore) loan taken from the cash-rich oil explorer Cairn India in July 2014.