MUMBAI, INDIA: Cairn India Holdings Limited (CIHL), an overseas subsidiary of Vedanta Limited, and Volcan Investments Limited have agreed to unwind entirely the structured investment entered between them in December 2018 ahead of the originally envisaged schedule.
With this, Volcan Investments will exercise the early exchange option available to it on 26 July 2019 and consequent to this the full exchange of its two issues of mandatory exchangeable bonds secured by shares in Anglo American plc, will settle on 12 August 2019.
The share price of Anglo American has close to doubled, since Volcan invested, delivering attractive gains to all investors.
The investment by Cairn India Holdings, which was entered into as part of its cash management activities, has delivered a net gain of over USD 100 million in the 8 month period it was held. Cash proceeds from the settlement of the transaction will be paid to CIHL on 13 August 2019.
Srinivasan Venkatakrishnan, CEO of VEDL, said: “We are pleased this structured investment has achieved a superior return for CIHL, as we expected when it was entered into. Our strategy continues to be to focus on our existing businesses, where we believe that there are significant opportunities to unlock their full potential.
The unwinding reflects our disciplined approach to treasury management and capital allocation together with our commitment at all times to act in the interests of all shareholders”.
Following the redemption of the structured instrument, completed with due Board approvals, CIHL will have no further economic exposure to Anglo American plc shares.