Vedanta Resources looking to merge Indian subsidiaries

Mining and exploration fir Vedanta Resources Plc is likely to merger two or more of its Indian subsidiaries, the India-listed Vedanta Ltd and Cairn India Ltd, while Vedanta Resources itself would remain London-listed.

The move is aimed at providing the debt-laden units access to cash from Vedanta group's other operations.

In a statement issued in response to media reports, Vedanta Resources PLC disclosed the possibility of a merger of its Bombay-listed subsidiaries Vedanta Ltd and Cairn India Ltd but said the holding company, Vedanta Resources PLC, would maintain its London-listing in case such transaction took place.

"Should a transaction with Cairn India proceed, it could potentially be considered a reverse takeover," Vedanta said in the statement.

"In addition, in line with the group's stated strategy to continue to simplify the group structure, the group continues to evaluate a transaction with the government of India in relation to their minority stakes in Hindustan Zinc Limited and Bharat Aluminium Company," it added, referring to two other subsidiaries in which the government holds large stakes.

Vedanta Resources shares in London rose as much as 8 per cent after the announcement, on course for the biggest one-day rise since mid April.

The London-listed parent has a majority stake in Vedanta Resources, which in turn holds a controlling  59.9 per cent stake in Cairn India.

Vedanta Resources had net debt of $8.5 billion as of 31 March.

Shares of Cairn India earlier closed down 4.3 per cent at Rs173 while shares in Vedanta closed up 3.1 per cent at Rs 182.55 on the Bombay Stock Exchange.