The merger with Cairn India to help us have a strong balance sheet: Anil Agarwal, Vedanta
Vedanta, says will bring the best of technology, people and the most sustainable and environmentally friendly way of functioning in the business of oil and gas, copper, zinc, iron ore.
What can we expect going forward now from this integrated entity- Cairn-Vedanta?
We filed with the ROC, we had board meetings, all the formalities are complete. This was expected. This is a fully diversified, integrated natural resource company out of India. It is very important that in India we produce our own oil and gas, gold, silver, copper, iron ore and this company takes us in that direction. We have almost $500 billion worth imports. We will bring the best of technology, best of people and the most sustainable and environmentally friendly way of functioning in the business of oil and gas, copper, zinc, iron ore.
This merger comes at a time when you have spoken about how you want to be the next Rio Tinto or the BHP Billiton of the world and there is activism against BHP Billiton to spin off its oil and gas division, but you have decided to merge into Vedanta. Why is that then?
At this point of time, it is very important to have a very strong balance sheet as you grow bigger. I also saw the news and this is about how some of the shareholders see that if they spin off oil and gas unit, it is good for the company. They were a separate company, they put it together and we are doing the same thing to make the balance sheet strong so we can grow better. Who knows after 10-20 years, we may also do the same thing.
There is also a very handsome dividend of Rs 17 announced for Cairn IndiaBSE 1.55 %. You being the majority shareholder. you get to gain from that as well?
We always look after the shareholders. My first thing is how we can better serve shareholders because I am looking very long term. If shareholders are happy, we all are happy. We will always be very gracious towards our shareholders.
You had announced an interim dividend for Hindustan ZincBSE -0.67 %. Is there any forward movement on the government’s residual stake sale in BALCO as well as Hindustan Zinc?
We have not heard anything but we always hear the government is looking, they should do it at some point of time and they have been saying that they will do it and hopefully they will do it soon.
Any production guidance that you can give us as to what we can expect from Cairn?
We will do our best. It was a marginal field, we have come up to 250,000-260,000 barrels. You have seen some of our production numbers today and we are looking to bring the best of technology and the government is also helpful with the self certification issue. We need a lot of approvals to increase our production and once the self certification comes which they are working on, it will help. So I am with you.
You also have huge cash reserves now thanks to Cairn. Can we expect some inorganic growth, any M&A which you may have planned, that would be on the cards?
No, not at the moment. At the moment, our hands are full. We have a lot to do. We are going to spend Rs 50,000-60,000 crore to balance our company to increase our production. By spending this kind of money, we will have about on average 40% production increase and we are focussing on that to how do we make sure that the full potential of the company we can look for.
You are in South Africa, does that have anything to do with the acquisition of the Anglo American make of De Beers Diamonds which you are of course buying a stake in your personal capacity?
No, we have taken a stake here and I am very happy. You know that we have a very large company. It is a large stake in Africa, we run the largest copper mine and we will run zinc mine as well. I am just here for a day, I am going back to London.
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What can we expect going forward now from this integrated entity- Cairn-Vedanta?
We filed with the ROC, we had board meetings, all the formalities are complete. This was expected. This is a fully diversified, integrated natural resource company out of India. It is very important that in India we produce our own oil and gas, gold, silver, copper, iron ore and this company takes us in that direction. We have almost $500 billion worth imports. We will bring the best of technology, best of people and the most sustainable and environmentally friendly way of functioning in the business of oil and gas, copper, zinc, iron ore.
This merger comes at a time when you have spoken about how you want to be the next Rio Tinto or the BHP Billiton of the world and there is activism against BHP Billiton to spin off its oil and gas division, but you have decided to merge into Vedanta. Why is that then?
At this point of time, it is very important to have a very strong balance sheet as you grow bigger. I also saw the news and this is about how some of the shareholders see that if they spin off oil and gas unit, it is good for the company. They were a separate company, they put it together and we are doing the same thing to make the balance sheet strong so we can grow better. Who knows after 10-20 years, we may also do the same thing.
There is also a very handsome dividend of Rs 17 announced for Cairn IndiaBSE 1.55 %. You being the majority shareholder. you get to gain from that as well?
We always look after the shareholders. My first thing is how we can better serve shareholders because I am looking very long term. If shareholders are happy, we all are happy. We will always be very gracious towards our shareholders.
You had announced an interim dividend for Hindustan ZincBSE -0.67 %. Is there any forward movement on the government’s residual stake sale in BALCO as well as Hindustan Zinc?
We have not heard anything but we always hear the government is looking, they should do it at some point of time and they have been saying that they will do it and hopefully they will do it soon.
Any production guidance that you can give us as to what we can expect from Cairn?
We will do our best. It was a marginal field, we have come up to 250,000-260,000 barrels. You have seen some of our production numbers today and we are looking to bring the best of technology and the government is also helpful with the self certification issue. We need a lot of approvals to increase our production and once the self certification comes which they are working on, it will help. So I am with you.
You also have huge cash reserves now thanks to Cairn. Can we expect some inorganic growth, any M&A which you may have planned, that would be on the cards?
No, not at the moment. At the moment, our hands are full. We have a lot to do. We are going to spend Rs 50,000-60,000 crore to balance our company to increase our production. By spending this kind of money, we will have about on average 40% production increase and we are focussing on that to how do we make sure that the full potential of the company we can look for.
You are in South Africa, does that have anything to do with the acquisition of the Anglo American make of De Beers Diamonds which you are of course buying a stake in your personal capacity?
No, we have taken a stake here and I am very happy. You know that we have a very large company. It is a large stake in Africa, we run the largest copper mine and we will run zinc mine as well. I am just here for a day, I am going back to London.
Visit: stock market advisory
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