New Delhi: Cairn India Ltd on Thursday told stock exchanges that the Mumbai bench of the National Company Law Tribunal (NCLT) has approved its merger with Vedanta Ltd, which is also a subsidiary of London-listed Vedanta Resources Plc.
The merger gives Vedanta access to Cairn’s oil and gas assets, including the prolific onshore fields in Barmer, Rajasthan. Cairn’s hydrocarbon production sharing contracts with the government will now get shifted to the merged entity.
The Vedanta group can now go ahead with its planned restructuring of its hydrocarbon operations including fresh technology adoption for enhanced oil and gas recovery.
“NCLT, Mumbai Bench has today approved the scheme of arrangement between Cairn India Limited and Vedanta Limited, and their respective shareholders and creditors. The certified copy of the order is awaited from the Tribunal,” Cairn informed the exchanges.
In response to an earlier detailed questionnaire on the merger, Cairn India had said that the “Cairn brand will be preserved and investment will continue in a big way, as projects have been identified.” While the two companies’ balance sheets will get merged, the Cairn brand will continue to exist for oil and gas operations.
“The merger will be positive as it will generate value for the shareholders and de-risk Cairn India by providing access to a portfolio of diversified assets in a volatile market and deliver significant near term value. As stated by Tom Albanese, CEO of Vedanta Ltd, on various occasions, the group is focused on growing its oil and gas business and Cairn will continue to be supported in its growth path,” Cairn told Mint on 7 February.
According to company law experts, NCLT clearance paves the way for consummation of the merger. “As per the Companies Act , 2013, jurisdiction of high courts relating to all company law matters has been vested in NCLT,” said Kamlesh Vikamsey, former president of accounting rule maker Institute of Chartered Accountants of India. The Mumbai bench of the NCLT admitted the petition filed by Cairn India for the merger on 25 January.