In an attempt to salvage the merger of cash-rich oil firm Cairn India with its debt-laden parent Vedanta Ltd, the company on Friday sweetened the deal by offering three additional preference shares in hope of winning over minority shareholders like Life Insurance Corporation of India (LIC). 

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Vedanta on Friday offered minority shareholders of Cairn India one equity share and four redeemable-preference shares with a face value of Rs 10 each. The preference shares will carry a coupon of 7.5% and tenure of 18 months.

"Each Cairn India minority shareholder will receive for each equity share held one equity share in Vedanta Ltd and four redeemable preference shares with a face value of Rs 10 in Vedanta Ltd, with a coupon of 7.5% and tenure of 18 months from issuance," the company said in a statement to the BSE.

Life Insurance Corp of India (LIC) and Cairn Energy Plc of UK are the biggest among the minority shareholders in Cairn India.

For the merger to go through, half of the minority shareholders, who together make up for 40% of the Cairn equity, have to approve the deal, the news agency said.

"Cairn India shareholders will benefit from exposure to a diversified portfolio of world-class, low cost, long-life assets with significant growth," Cairn India chief financial officer and acting chief executive officer Sudhir Mathur said in a statement to the BSE.

We are confident that the financial strength and diversified portfolio of tier-I assets will provide de-risked earnings and stable cash flows, driving long-term value, Mathur added. 

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