Vedanta: CIHL exits investment with US$ 100 million gains

Vedanta's subsidiary, Cairn India Holdings Limited (CIHL) plans to unwind its structured investment in Anglo American Plc through the early exchange option, the company informed on Friday.

CIHL had purchased an economic interest in the form of equity shares of Anglo American Plc from Volcan Investments Limited in December 2018. The share price of Anglo American have double since then. CIHL had invested Rs. 3,812 crore and according to Vedanta's annual report, the transaction was positively marked to market by Rs. 1,041 crore, as on March 31, 2019. The two companies had entered a structured investment deal which was to expire in April 2020 and October 2020. Volcan will exercise the early exchange option and the cash proceed will be paid on August 13, 2019.

Earlier in response to an appeal filed by Cairn UK Holdings with the Securities Appellate Tribunal (SAT) against Cairn India, the tribunal directed SEBI to look into the matter of alleged violation of market norms in relation to withholding of dividends payment of around Rs. 340 crore. Cairn UK had initial approached SEBI which dismissed the case saying the the unpaid dividend was handed over by the company to Income Tax authorities.

Reacting to all these developments, the stock of Vedanta Limited was trading at Rs. 166.45 per share, down by 2.86 per cent at 12:58 hours, on Friday. The stock opened at Rs. 175.10 and hit a high of Rs. 175.60 per share on BSE.