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Vedanta, earlier known as Sesa Sterlite, will buy up to a 5.33 per cent stake in subsidiary Cairn India at Rs 220.40 per share, the latter said in a filing to the exchange on Wednesday. The purchase will take place on June 3.
Up to 100 million shares were to be bought from Cairn India’s promoter Twin Star Mauritius Holdings, said the filing. After the sale, Twin Star Mauritius Holdings will hold 34.08 per cent in Cairn India, down from 39.41 per cent.
On March 31, 2015, Vedanta held 59.9 per cent in Cairn India.
“The move is neutral as the purchase will happen within the promoter holdings and is not from the open market,” said an analyst with a local brokerage. “Such stake transfers do not mean anything about the merger of the subsidiary with Vedanta,” he added.
Early this year, Anil Agarwal, promoter of the London-based Vedanta Group, which owns a 62.5 per cent stake in Vedanta, had said the company had appointed consultants to explore the merger of Cairn India and Hindustan Zinc with Vedanta.
Vedanta recently announced India's largest Rs 20,000 crore goodwill impairment charge for Cairn India. “Our decision of goodwill impairment was a result of the declining pattern in crude oil prices along with the trend seen among global oil and gas companies, which closed their accounts for the calendar year with asset impairment,” Tom Albanese, chief executive officer of Vedanta, had said at an earnings conference call last month.
BIG BUY
Up to 100 million shares were to be bought from Cairn India’s promoter Twin Star Mauritius Holdings, said the filing. After the sale, Twin Star Mauritius Holdings will hold 34.08 per cent in Cairn India, down from 39.41 per cent.
On March 31, 2015, Vedanta held 59.9 per cent in Cairn India.
“The move is neutral as the purchase will happen within the promoter holdings and is not from the open market,” said an analyst with a local brokerage. “Such stake transfers do not mean anything about the merger of the subsidiary with Vedanta,” he added.
Early this year, Anil Agarwal, promoter of the London-based Vedanta Group, which owns a 62.5 per cent stake in Vedanta, had said the company had appointed consultants to explore the merger of Cairn India and Hindustan Zinc with Vedanta.
Vedanta recently announced India's largest Rs 20,000 crore goodwill impairment charge for Cairn India. “Our decision of goodwill impairment was a result of the declining pattern in crude oil prices along with the trend seen among global oil and gas companies, which closed their accounts for the calendar year with asset impairment,” Tom Albanese, chief executive officer of Vedanta, had said at an earnings conference call last month.
BIG BUY
- Vedanta to buy up to 5.33% in Cairn India for Rs 220.40/share
- The purchase will take place on June 3
- After the sale, Twin Star Mauritius Holdings will hold 34.08 per cent in Cairn India, down from 39.41 per cent
- On March 31, 2015, Vedanta held 59.9 per cent in Cairn India
