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Vedanta Acquired Cairn
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  • We are a globally diversified natural resources group committed to sustainable development, supporting local communities and contributing to the economies of the areas where we operate. Our assets and operations are located in the high growth markets of India, Zambia, Namibia, South Africa, Liberia, Ireland and Australia. We are primarily engaged in copper, zinc, silver, aluminium, iron ore and power business. We have experienced significant growth in recent years through various expansion projects for our copper, zinc, lead silver, aluminium, iron power and power businesses. Our Group Revenue for the fiscal year ending 31 March 2011 was US$ 11.4 billion. We have spent approximately two-third of our US$ 19 billion capital expenditure programme as of 30 September 2011. We are the world’s largest integrated Zinc Lead producer and among the top producers of copper, iron ore and silver. We embed sustainable development into all aspects of what we do and support communities where we operate to improve their quality of life. About 2.7 million people in about 550 villages have benefitted from our programmes that include sustainable livelihood development, education, women empowerment, and healthcare.
  • Vedanta Resources Plc has bought 11% stake for $1.5 Bn in Cairn India Ltd from Malaysia's national oil corporation Petronas.Vedanta bought the stake at Rs.331 a share, a 1.6% discount to Cairn India's closing price of Rs.336 on Monday.Petronas also sold its remaining 3.9% stake to some foreign portfolio investors.Transaction Reference: BloombergVedanta's $9.6 Bn deal to buy a majority stake from Cairn Energy Plc in Cairn India Ltd is yet to receive the Indian government's approval, eight months after its announcement, due to a dispute in royalty payments by Cairn India’s partner, ONGC.Last August, Vedanta had announced to buy 51-60% of Cairn India for as much as $9.6 Mn. Cairn Energy, Cairn India’s majority shareholder, will sell 40-51 % of its holding to Vedanta, depending on the result of the open offer, which is scheduled to close on April 30, 2011. Vedanta is buying the stake from Cairn Energy at Rs.405 per share (includes Rs.50 as a non-compete fee).The acquisition was part of Anil Agarwal's plan to get exposure in India's oil reserves. Vedanta will join BHP Billiton as the only miner with large oil interests. The 11% stake acquisition will help Vedanta gain a majority stake in the company even if an open offer to buy additional shares in Cairn India from minority shareholders, which opened on April 11 and closes on April 30, does not see a big response.Petronas had acquired a 10% stake in Cairn India at Rs.176.48 a share before Cairn India's December 2006 IPO. Petronas bought an additional stake at Rs.224.30 each in a preferential allotment in March 2008 and paid about $240 Mn for an additional 2.3% stake in Cairn India in October 2009, taking its total to 14.9%.Also Read: Vedanta To buy 51-60% In Cairn India for $8.5-9.6 Bn
  • Vedanta Resources plc ("Vedanta") today announces the completion of the acquisition of 30% of the fully diluted share capital of Cairn India from Cairn Energy PLC by the Vedanta group.  The Vedanta group now holds 58.5% of the fully diluted share capital of Cairn India and has paid a total gross consideration of US$8.67 billion.  Of the 58.5% stake, 20% is held by Sesa Goa Limited, a subsidiary of Vedanta.Commenting on the transaction, Anil Agarwal, Chairman of Vedanta said: " The acquisition is a landmark event for the global natural resources sector and for India, which is looking at sustainable energy sources to fuel its growing economy. We would like to express our deep sense of gratitude to the Government of India for their support and cooperation. Vedanta and Cairn India have a shared vision of sustainable development with focus on delivery, excellence and costs  and we are delighted with this partnership. Cairn India possesses an enviable talent pool and we welcome them to the Vedanta family. We firmly believe that Cairn India has the potential to double its current capacity and we will work together to achieve it."For further information, please contact:Investors:Ashwin BajajSenior Vice President - Investor RelationsVedanta Resources plc About Vedanta Resources plcVedanta Resources plc ("Vedanta") is a London listed FTSE 100 diversified metals and mining major. The group produces aluminium, copper, zinc, lead, silver, iron ore and commercial energy. Vedanta has operations in India, Zambia, Namibia, South Africa, Ireland and Australia and a strong organic growth pipeline of projects. With an empowered talent pool of 31,000 employees globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. For more information, please visit:www.vedantaresources.com.

Transcript

  • 1. Vedanta Acquired a controlling stake in Cairn India Ltd
  • 2. Vedanta Resources Plc• Vedanta Resources plc ("Vedanta") is a London listed FTSE 100 diversified metals and mining major.• Globally diversified natural resources group• world’s largest integrated Zinc Lead producer and among the top producers of copper, iron ore and silver.• Group Revenue for the fiscal year ending 31 March 2011 was US$ 11.4 billion.
  • 3. Locations & operationsGeographical Locations: – Australia – India – Liberia – Namibia – South Africa – United Kingdom – ZambiaOperations: – India – Aluminium, Copper, Zinc, Iron Ore, Power – Australia – Copper – Zambia - Copper – Namibia - Zinc – South Africa - Zinc – Liberia – Iron Ore – Ireland – Zinc
  • 4. Financial Summary
  • 5. Vedanta Group Structure
  • 6. Cairn India ltd• Cairn India – largest private crude producer in India (>20% of India’s production) − World class assets at Rajasthan (>6.5 bn boe in place, with substantial upside) − Low cost operations at Rajasthan and potential to produce 240,000 bopd − Recent exploration success in Sri Lanka − Strong, experienced management team
  • 7. • Cairn India is one of the most significant oil and gas exploration and production companies in South Asia.• 1295 employees in India alone and world class oil reserves in one of the fastest-growing economies in the world.• Cairn India has operations in Andhra Pradesh, Gujarat and Rajasthan.
  • 8. • Financials Revenue - INR 102,779 million. PAT - INR 63,344 million. (31 March, 2011)• Shares in issue 1,902,582,377 equity shares of Rs.10 each as on 30 September 2011.• Listings Cairn India was listed on 9 January 2007 on the Bombay and National Stock Exchanges. It is ranked amongst the top 25 companies in term of market capitalization.
  • 9. Vedanta Bought 11% Of Cairn India From Petronas• Malaysias national oil corporation Petronas had a 12.3% stake in Cairn India before transaction• Vedanta Resources Plc has bought 11% stake for $1.5 Bn in Cairn India Ltd from Petronas on April,2011• Vedanta bought the stake at Rs.331 per a share• The acquisition was part of vedanta’s plan to get exposure in Indias oil reserves.• Vedanta group held 28.5 after the transaction%
  • 10. Vedanta’s Proposal to Cairn• Cairn Energy, which owns 52.11% stake in Cairn India, has voted to accept government conditions.• The company dint not pay any royalty on its 70% interest in the Rajasthan fields.• The royalty was paid by ONGC, which got a 30% stake in the 6.5 billion barrel field for free.• The Cabinet Committee on Economic Affairs (India) on June 27 gave consent to the Cairn-Vedanta deal
  • 11. Vedanta Acquired Cairn• Acquired 30% of the fully diluted share capital of Cairn India from Cairn Energy PLC on 8th Dec 2011• The Vedanta group now holds 58.5% of the fully diluted share capital of Cairn India and has paid a total gross consideration of US$8.67 billion.• Of the 58.5% stake, 38.5% stake held by vedanta plc and 20% is held by Sesa Goa Limited, a subsidiary of Vedanta.• After transaction,Cairn retains an 22% share holding in Cairn India.
  • 12. Cairn Acquisition FundingConsideration ($bn)20% stake acquired by Sesa Goa 2.8838.5% stake acquired by Vedanta plc 5.79Total Consideration 8.67
  • 13. FundingSesa Goa – Own resources 2.88Sr. Secured Bank Term Loan 2.78Bonds 1.65Own Cash 1.36Bridge to Equity never drawnVedanta plc – Total 5.79Total Funding 8.67
  • 14. Credit MetricsProforma 30 Sep 2011 (including Cairn) in $ mn Debt Cash and Liquid Investments Net DebtVedanta plc 9,127 178 8,949Vedanta Consolidated 16,620 6,438 10,18
  • 15. Benefits• The acquisition is a landmark event for the global natural resources sector and for India, which is looking at sustainable energy sources to fuel its growing economy.• Cairn India possesses an enviable talent pool and vedanta welcomes it to the their family.• Vedanta believes that Cairn India has the potential to double its current capacity and both will work together to achieve it.
  • 16. Summary• Immediately earnings accretive• World class asset and management team• Common operating philosophy – focus on delivery and costs• Maintain strong credit metrics – funded through 50% own resources and 50% debt• Unique opportunity to create value enhances and diversifies Vedanta’s strong growth profile
  • 17. Prepared by P.SARAVANAN B.Tech.,MBAwww.twitter.com/saravananrulez
  • 18. Thank You