Mining giant Vedanta will hold a meeting of its creditors on September 8 in Goa to seek their approval for the merger of Cairn India with it under a revised all-share deal.
Vedanta has called meetings with its both secured and unsecured creditors on same date in Goa to seek their approval for the merger.
It has already scheduled a meeting of equity shareholders on the same day in Goa for approval of the merger.
The High Court of Bombay at Goa on December 18, 2015 and July 22, 2016, had directed the firm to convene a meeting of secured and unsecured creditors of Vedanta on September 8, or immediately after the meeting of the company’s secured creditors, Vedanta said in separate regulatory filings.
The orders of the High Court are over the proposed merger of Cairn India with Vedanta Ltd, it added.
Pursuant to the orders, the company will seek approval of its secured and unsecured creditors for the proposed scheme of Cairn India with Vedanta Ltd, the filings said.
Yesterday, Cairn India said it has called a shareholders’ meeting on September 12 to seek approval for its takeover by parent firm Vedanta Ltd under a revised all-share deal.
In a bid to salvage the merger of cash-rich oil firm Cairn India with its debt-laden parent Vedanta, billionaire Anil Agarwal-led group had last month sweetened the deal by offering three additional preference shares in hope of winning over minority shareholders like LIC.
Through the merger, Agarwal is looking to create India’s largest diversified natural resources firm, which could compete with BHP Billiton and Vale SA.
In the revised offer, Vedanta will give 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 per cent and tenure of 18 months.
Vedanta is said to be wanting to use Rs 23,290 crore cash lying with Cairn to pay off part of its Rs 77,952 crore debt. It had in May rolled over a controversial USD 1.25-billion loan taken from Cairn India in July 2014.
For the merger to go through, half of the minority shareholders, who together make up for 40 per cent of the Cairn equity, have to approve the deal.
State-owned LIC holds 9.06 per cent in Cairn India while the company’s former promoter Cairn Energy Plc of the UK has 9.82 per cent interest. The deal will go through if LIC votes in favour of the deal, a source said.
Post-merger, London-listed parent Vedanta Resources Plc’s holding in Vedanta will drop to 50.1 per cent from 62.9 per cent. Cairn India’s minority shareholders will own 20.2 per cent and Vedanta minority shareholders 29.7 per cent in the merged entity.
In June last year, Vedanta had offered shareholders of Cairn India one ordinary share and 7.5 per cent redeemable preference share with a face value of Rs 10 each.