Cairn-Vedanta merger deal not to be reworked

There was speculation that the deal may be reworked for minority shareholders' satisfaction

Anil Agarwal-owned Vedanta has ruled out any reworking of the merger terms between oil producer Cairn India and itself.

“We know about the recent media speculation, but it is just speculation. In fact, what has been approved by the respective boards will be taken to shareholders,” said Tom Albanese, chief executive, commenting on the speculation that the deal might be reworked for minority shareholders’ satisfaction.

According to the proposed deal, these shareholders would receive one Vedanta (earlier known as Sesa Sterlite) share along with one preference share, with a coupon of 7.5 per cent, for every share they hold in Cairn India.

The minority shareholders believe the company’s real valuations are higher than the one estimated by Vedanta. The promoters own 60 per cent stake, while LIC owns 9.06 per cent stake in Cairn India. Cairn Holdings owns another 9.82 per cent in the company.

D Jalan, chief financial officer, Vedanta , said the company was going to refinance its debt maturities by converting its short-term instruments into long-term instruments, with the help of state-run as well as private banks. Vedanta’s total debt stands at Rs 79,433 crore.

“We have the option to refianance our debt through short-term maturities, but at the same time we are trying to extend our maturity profile for the longer term. We are going for more long-term financing. For that, we have tapped the Indian banks.”