Vedanta, Cairn India edge lower on reports LIC seeks more premium to approve merger

Vedanta and Cairn India fell 0.82% to 2.32% at 14:38 IST on BSE on reports the Life Insurance Corporation of India has decided to drive a harder bargain before providing its assent to the proposed multi-billion Vedanta-Cairn India merger deal.

Vedanta (down 2.32% at Rs 174.45) and Cairn India (down 0.82% at Rs 180.90) edged lower.

Meanwhile, the S&P BSE Sensex was up 252.68 points or 0.95% at 26,939.19.

According to reports, the Life Insurance Corporation of India (LIC) feels the terms of the Cairn-Vedanta deal are not completely in favour of Cairn India shareholders and wants Vedanta to offer dividend higher than the 7.5% it is currently offering on redeemable preferred shares. LIC has also insisted Vedanta to clarify how it plans to use Cairn India's lucrative Rs 23000 crore cash, reports added.

LIC held 9.06% stake in Cairn India (as per the shareholding pattern as on 31 March 2015).

Vedanta and Cairn India on 14 June 2015, announced that Cairn India will be merged with Vedanta. As per the merger scheme, minority shareholders of Cairn India will receive one equity share of Vedanta for each share held in the company. The minority shareholders of Cairn India will additionally get one 7.5% redeemable preference share (RPS) of Vedanta of a face value of Rs 10 each for each share held in the company. No shares will be issued to Vedanta or any of its subsidiaries for their shareholding in Cairn India.

On consolidated basis, Cairn India reported net loss of Rs 240.82 crore in Q4 March 2015 compared with net profit of Rs 3035.44 crore in Q4 March 2014. Net sales declined 47% to Rs 2677.20 crore in Q4 March 2015 over Q4 March 2014.

Cairn India is one of the largest independent oil & gas exploration and production companies in India.

On consolidated basis, Vedanta reported net loss of Rs 19228.12 crore in Q4 March 2015 compared with net profit of Rs 1621.55 crore in Q4 March 2014. Net sales declined 14.7% to Rs 17732.25 crore in Q4 March 2015 over Q4 March 2014.

Vedanta is a diversified natural resources company, whose business primarily involves exploring and processing minerals and oil & gas.

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