15th Jun 2015 06:00
LONDON (Alliance News) - London-listed Vedanta Resources PLC Sunday said it's merging two important Indian subsidiaries as it looks to simplify its structure.
The move results in the combination of Vedanta Ltd and Cairn India.
Minority shareholders in Cairn India will receive one equity share in Vedanta Ltd, as well as one redeemable preference share in Vedanta Ltd with a face value of INR10, implying a premium of 7.3% to the previous closing price.
Vedanta Chairman Anil Agarwal, who founded the group in 1976, said the deal means the FTSE 100 natural resources company is "uniquely positioned" to support India's economic growth.
"This marks a significant step towards achieving our stated long term vision of a simplified group structure with alignment of interests between all shareholders for the creation of long term sustainable value," Agarwal said in a statement.
Chief Executive Tom Albanese, who previously held the same role at mining giant Rio Tinto PLC, said the combination of Vedanta Ltd and Cairn India will help to "unlock" India's energy and mineral resources.
"It will result in improved financial flexibility to allocate capital to the highest return projects and sustain strong dividends. The combined entity is uniquely positioned to help unlock India?s wealth of world-class energy and mineral resources," Albanese said in a statement.
The merger requires approval from shareholders in the two subsidiaries, as well as from those in London-listed Vedanta Resources, while other authorities must also consent to the deal.
By Samuel Agini; [email protected]; @samuelagini
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