Vedanta Shareholders approve deal with Cairn

Vedanta Shareholders approve deal with Cairn

New Delhi: Shareholders of Vedanta Resources Plc have approved the proposed acquisition of majority stake in Cairn India for up to $9.6 billion, said an official of the London-listed mining group.

“The shareholders approved the transaction at an extraordinary general meeting (EGM) in London yesterday," said the official.

Vedanta on 16 August announced buying the Edinburgh- based Cairn Energy Plc’s 40-51% stake in its Indian unit and an additional 20% through an open offer to minority shareholders of Cairn India.

According to the official, to fund the deal Vedanta has secured a syndicated term loan of up to $3.5 billion from a consortia of banks. It has taken two bridge loans of $1.5 billion and $1 billion to finance the transaction.

The company has missed the earlier deadline of seeking shareholders’ approval by 30 October as per the schedule laid out by UK’s Cairn Energy.

Billionaire Anil Agarwal-run Vedanta in the circular for the EGM stated that the transaction is to be completed by 15 April, 2011.

Oil minister Murli Deora had yesterday stated that the government will by March 2011 decide on giving approval to the Cairn-Vedanta deal.

After denying government role for months, Cairn had only late last month made applications for approval for transfer of control in all the 10 properties held by its Indian unit.

In the circular, Agarwal stated, “The acquisition is also subject to any required government of India consents having been given."

Vedanta also hopes to get Indian market regulator Sebi’s nod for acquiring an additional 20% stake from minority shareholders of Cairn India by month-end and may launch an open offer in the early part of January, 2011.

Besides the shareholder nod, the deal is also conditional on completion of the open offer. It will lapse if the conditions are not satisfied or waived on or before 15 April.

Sources said that if the government’s nod was to come by March, it would be well within the 15 April, 2011, deadline set by Cairn and Vedanta for closure of the transaction.

In the circular, Agarwal said the acquisition would establish Vedanta as a leading player in the Indian oil and gas sector. “The acquisition will allow Vedanta to apply its core skills of project management and development of reserves and resources in conjunction with the technical knowledge and capabilities of Cairn India."

Cairn Energy had in October secured its shareholders’ approval for selling most of its 62.38% stake in the Indian unit, while Sesa Group, a Vedanta Group firm that will make an open offer for a 20% stake in Cairn India, obtained approval from its shareholders on 18 October.