Clarifying the Cairn India-Volcan Investment transaction, Anil Agarwal-led Vedanta on Monday said the structure provides significantly higher returns compared to other overseas cash management investments that would typically return around two per cent.
Last week, Vedanta announced that Cairn India Holdings Limited, would invest $0.5 billion in Volcano Investment Limited, the parent company of Vedanta Limited, as part of the structured investment representing the economic interest in the upside potential of 24.71 million shares or 1.8 per cent outstanding shares of Anglo American PLC.
Volcan Investment holds 21 per cent stake in Anglo American PLC, which is a globally diversified mining business that comprises of De Beers (the largest diamond entity), copper, platinum and other precious metals, iron ore, coal and nickel.
The investment was made on an arms-length basis in December 2018 after meeting all governance requirements.
The economic interest was valued by an independent valuer and approved by the boards of Cairn India and Vedanta. This was disclosed in the earnings release of third quarter.
“We remain committed at all times to act in the interest of all shareholders and look forward to continued engagement with them,” said Vedanta in its release.
