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Vedanta Resources says it's all set to complete the long-awaited Cairn deal, as its Chairman said he was confident the Government would separate the matter of the corporate transaction from the issue of royalties.
Mr Anil Agarwal said the company had told the Government that the sale of shares by parent firm Cairn Energy was a corporate transaction and had to be cut off from the matter of what royalty payments were due. “This has to be separate and cannot be linked,” said Mr Agarwal on an investor call as the London-listed firm unveiled its preliminary results for the year ending in March.
“We are working through that and believe they will agree to that in a short period of time,” he said, later adding, “We have a very strong feeling that this will be delinked. At this point in time, I believe the original agreement will move forward.”
The Group of Ministers meeting at which the deal was set to be deliberated on was postponed from Monday.
The company will acquire a total of a 58.5 per cent stake in Cairn India, with a total value of $9.4 billion — “a slightly lower price than envisaged”— Chief Executive, Mr M.S. Mehta, confirmed on the call.
Following an open offer that ended in March, Sesa Goa has acquired 8.1 per cent of Cairn India's share capital, as well as an additional 10.4 per cent from Petronas International, which Vedanta says it acquired at a price advantage.
Parent company Cairn Energy said it would be selling an additional 40 per cent stake to Vedanta, leaving its total holding at 21.7 per cent.
Revenues rise
The news came as Vedanta reported a 55.4 per cent rise in EBITDA to $3.5 billion on a 44 per cent increase in revenues. The company raised its final divided to 32.5 cents a share — 18.2 per cent up on the year before.
“Against a background of recovering economic conditions in the developed world and continued strong demand from emerging economies, we have delivered a robust financial performance,” said Mr Agarwal.
The firm also confirmed that it would be evaluating whether to go ahead with the listing of its Zambian copper business, KCM, later this year. There would be no linkage between the decision on KCM and the Government's verdict on the Cairn deal, Mr Mehta said.
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