Mumbai, Sep 15 (IANS) The Anil Agarwal-led natural resources firm Vedanta Ltd. on Tuesday said it has received approvals from both the Bombay Stock Exchange (BSE) and the NSE on the company’s proposal to merge with its hydrocarbons subsidiary Cairn India.
“Vedanta and Cairn India have received ‘No Objection’ from BSE and the National Stock Exchange of India vide their Observation Letters dated September 10, 2015 in relation to merger of Cairn India with Vedanta,” the mining major said in a stock-exchange filing.
“No Objection letters has been issued by the stock exchanges after receiving comments from market regulator Securities and Exchange Board of India (Sebi),” it added.
In June, Vedanta announced the merger of two of its group companies – oil and gas exploration major Cairn India with Vedanta Ltd. Cairn shareholders will get one equity and one redeemable preference share of Vedanta.
In a stock exchange filing at the time, it said: “Approximately 752 million each of equity shares and redeemable preference shares will be issued to the minority shareholders of Cairn India by Vedanta Ltd pursuant to the merger.”
Vedanta Ltd. itself was created with the merger of Sesa Goa, Sterlite and Vedanta Aluminium.
Vedanta took majority control of Cairn India for $8.67 billion in 2011 and holds 59.9 percent in the latter through its various units.
Merging Cairn India with itself would provide Vedanta access to the oil explorer’s cash and help reduce its debt burden.
Also in June, Vedanta hiked stake in its oil and gas exploration subsidiary Cairn India by nearly five percent for $315 million from a wholly-owned subsidiary — Twinstar Mauritius Holdings (TSMHL).
In May, Vedanta’s parent company, the London-based Vedanta Resources, had said its eyeing likely low interest rates in India to refinance its short-term loans of up to $1.6 billion (about Rs.10,200 crore) with long-term options this fiscal.
Vedanta has said that for the first quarter ended June, its gross debt increased by Rs.1,778 crore to Rs.79,530 crore on account of funding project payments and temporary working capital requirements.
Its gross debt is composed of long-term loans of Rs.64,825 crore, and Rs.14,705 crore for short-term working capital.