Cairn India and Vedanta rose 1.85% and 2.01% respectively at 14:42 IST on BSE after the shareholders of Cairn India approved the company's merger with Vedanta.
Vedanta (up 2.01% at Rs 164.80) and Cairn India (up 1.85% at Rs 192.45) edged higher.
Meanwhile, the S&P BSE Sensex was down 39.23 points or 0.14% at 28,314.31.
Cairn India's equity shareholders approved the scheme of arrangement for merger of the company with Vedanta with requisite majority. Vedanta's shareholders had already approved the same on 9 September 2016.
Tom Albanese, CEO of Vedanta said that the approval for the Vedanta and Cairn India merger by both sets of shareholders consolidates Vedanta's portfolio of attractive, Tier-I assets and simplifies the group structure. Vedanta remains committed to delivering superior value for the shareholders of the merged company through its diversified portfolio of world-class, low cost, long-life assets that have significant growth potential.
The merger scheme is now subject to the approval of the jurisdictional High Courts and other regulatory approvals and is expected to be effective by the end of the current financial year (FY 2017).
It may be recalled that Vedanta, Cairn India and the parent company, Vedanta Resources plc had announced revised and final terms to the recommended merger between Vedanta and Cairn India on 22 July 2016. The boards of Vedanta and Cairn India had approved revised and final terms for the transaction, taking into account prevailing market conditions and having regard to underlying commercial factors. Pursuant to the revised and final terms, each Cairn India minority shareholder would receive for each equity share held in Cairn one equity share in Vedanta and four redeemable preference shares with a face value of Rs 10 in Vedanta with a coupon of 7.5% and tenure of 18 months from issuance and implied premium of 20% to one month volume weighted average price (VWAP) of Cairn India share price.
Vedanta is a diversified natural resources company. Its business primarily involves producing oil & gas, zinc - lead - silver, copper, iron ore, aluminium and commercial power. The company has a presence across India, South Africa, Namibia, Australia, Ireland, Liberia and Sri Lanka. The company's consolidated net profit fell 27% to Rs 615.02 crore on 15.2% decline in net sales to Rs 14364.01 crore in Q1 June 2016 over Q1 June 2015.
Cairn India, a part of the Vedanta group, is one of the largest independent oil and gas exploration and production companies in India. On a consolidated basis, the company's net profit slipped 28.3% to Rs 359.55 crore on 28.2% fall in net sales to Rs 1885.11 crore in Q1 June 2016 over Q1 June 2015.
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