The company's $1.25 billion loan to a subsidiary of its affiliate Sesa Sterlite hasn't gone down well with investors
When it comes to cash management within a group, this deal was seen as a lesson on what companies should not do. On 23 July, Cairn India Ltd, the cash-rich oil and gas unit of Vedanta Resources Plc, said it had extended a $1.25 billion loan to a subsidiary of its affiliate Sesa Sterlite Ltd. The announcement was made on a conference call after its annual general meeting the same day. The move that did not go down well with Cairn investors, who gave its stock the thumbs-down. Experts debate the issue.