“We are in regular touch with the shareholders of both the companies and the response has been very encouraging. The market has embraced the proposed merger and we are confident that the shareholders will approve the decision,” Tom Albanese, CEO of Vedanta said on the sidelines of the company’s 50th Annual General Meeting. He termed the merger as a “win-win for shareholders of both the companies”.
“We are very much confident that it will get completed as per the timeline announced by <g data-gr-id="41">fourth</g> quarter of this fiscal year,” he added. Albanese further said <g data-gr-id="35">post merger</g>, Vedanta will emerge as India’s first and largest diversified natural resources company and will maximise returns to the shareholders of both the companies.
“With this merger, Vedanta is taking a significant step towards achieving its long-term vision of simplifying company’s corporate structure and maximising shareholder returns,” the CEO said. Last month, the company had announced to merge its oil exploration arm Cairn India into itself through an <g data-gr-id="43">all share</g> deal and proposed to offer one share of Vedanta against one share of Cairn to the minority shareholders of the oil exploration firm. Besides, Cairn shareholders have also been offered one redeemable preference share of Rs 10 face value with 7.5 <g data-gr-id="44">per cent</g> annual dividend for each share held in the company.
Cairn India has assets such as Mangala, Aishwariya, Barmer and Cambay which produce around 27 <g data-gr-id="39">per cent</g> of India’s crude output. The company has cash and cash equivalent of about Rs 17,000 crore on its books. <g data-gr-id="37">Vedanta</g> on the other hand, has over 60 per cent of its assets in India and around 13 per cent in Africa. Albanese reiterated that the merger will benefit and create long-term value for the shareholders of all the three companies - Vedanta Ltd, Cairn India and Vedanta Resources.
“We are committed to sustaining and enhancing the Cairn India brand and maximising its potential,” he added. According to him, the merger will deliver significant economies of scale, including improved optionality to allocate capital and will strengthen interactions with the government and sustainability initiatives.
OVL not to exit Vietnam block
New Delhi: ONGC Videsh Ltd, the overseas arm of state explorer Oil and Natural Gas Corp, has decided not to exit a Vietnam oil block in the contested waters of the South China Sea despite poor hydrocarbon <g data-gr-id="96">prospectivity</g>. OVL has decided to seek a third extension of exploration licence for Block 128 to maintain India’s strategic interest in the South China Sea, a top official said. The block lies in the part of <g data-gr-id="103">South China Sea</g> over which China claims sovereignty. In 2011, Beijing had warned OVL that its exploration activities off the Vietnam coast were illegal and violated China’s sovereignty, but the company continued exploring for oil and gas. “OVL has not found any hydrocarbons in the block but will continue operations in line with India’s strategic and diplomatic interest in the region,” he said.
The extended exploration licence for Block 128 is due expire this month and the company is seeking an extension. OVL reckons that if it was to exit the block, it would have to pay USD 15-20 million <g data-gr-id="101">penalty</g> for not drilling a committed exploration well. By continuing with the block, it is not just saving on the penalty but also helping New Delhi maintain its strategic interest in the region, he said. The renewal is being seen as India’s attempt to assert its presence in the region. OVL forayed into Vietnam as early as <g data-gr-id="105">1988,</g> when it bagged the exploration licence for Block 06.1. The company got two exploration blocks - Block 127 and Block 128, in 2006. However, Block 127 was relinquished after completing the work programme, but the other Block 128 continued to be retained.