VEDANTA-CAIRN

Vedanta Group Acquisition of Controlling Stake

in Cairn India
 VEDANTA
 
 They are the first Indian manufacturing company to be listed
on the London Stock Exchange.
 
 They have operating locations in India, Zambia and Australia.

 They are headquartered in London and have over 30,000

employees

 Vedanta Resources plc is a diversified metals and mining

company with revenues in excess of US$6 billion. based in
London.
 
 
 GOING FOR BLACK GOLD
GOING FOR BLACK GOLD
 CAIRN INDIA
 Cairn India is now one of the biggest private exploration
and production companies currently operating in India.
 The company was acquired by Caledonian Offshore
Limited in 1988 and was renamed Cairn Energy PLC.
 Cairn India was listed on 9 January 2007 on the Bombay
and National Stock Exchanges.
 Cairn India currently has a market capitalisation in
excess of USD 13 billion, ranking as the fourth largest
oil and gas company in India.
Cairn India’s Asset Base
CAIRN INDIA:Sales And Growth
 Transaction Highlights

 Cairn to sell a maximum of 51 per cent of Cairn India to

Vedanta

 Consideration of up to US $8,480m (INR 396,561m),

based on US $8.66 (INR 405) per Cairn India share*

 A premium of approximately 32 per cent to the Cairn India

average closing price for 90 days prior to 14 August 2010

 Put and call options, exercisable after July 2012 and July
2013, to ensure a majority interest in Cairn India can be
sold (exercisable at US $8.66 (INR 405))
 Intention to return a substantial proportion of the
proceeds from the transaction to Cairn shareholders

 Retained cash will provide Cairn with financial

flexibility to pursue an active exploration programme in
its leading acreage position in Greenland and future
growth opportunities

 Continued exposure to Rajasthan through the retained

shareholding in Cairn India

 Completion expected 1st quarter of 2011

 Reasons for the Proposed Transaction

 A unique investment: the Indian natural resources champion

meeting the needs of a growing economy

 Leverages Vedanta’s core skills

 Cairn India is a world class asset

 EPS accretive
 Transaction Financing
 Transaction consideration of US$8.5bn to US$9.6bn
 Payable on completion (expected by Q1 2011)

Funding
 Vedanta Resources: bank debt facilities of up to
US$6.5bn, ≥ 2 year tenure
 Sesa Goa: c. US$3bn, primarily from cash resources
 Unique Opportunity to Create Value

 Creating an Indian natural resources champion:

comprehensive footprint across India’s resources sector
 World class asset and management team

 Leverages Vedanta’s core skills

 Common operating philosophy: focus on delivery and

costs
 Enhances and diversifies Vedanta’s strong growth
profile.
 Financial flexibility retained and no impact on existing
expansion programmes
 Immediately EPS accretive for shareholders
Questions to be Answered
 Why the deal?
 Why enter a different market?
 Is the deal expensive?
 What are the problems faced by ONGC?
 Credibility of Vedanta questioned?
 Problem with Sesa Goa and minority share holders?
 Why only Sesa Goa?
 Problems from the government side.