CAIRN INDIA LTD. - Clarification from Cairn India Ltd
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| 25 Jul 2014 | |
| The Exchange had sought clarification from Cairn India Ltd with respect to the news article in the Media (Business Line - July 25, 2014) that "Cairn tanks on $1.25-b Loan to Sesa arm".<br/><br/>Cairn India Ltd has replied as under:<br/><br/>"we would like to clarify that the Company has complied with the applicable Regulatory requirements in respect of the said transaction. This being a Related Party Transaction (RPT), prior approval of the Audit Committee was taken and the transaction is being effected on arm's length principle. The said loan has been extended by subsidiaries of Cairn India and the coupon rate is commensurate with the market rate for such transaction.<br/> <br/>The amended Clause 49, which will be effective from, 1st Oct, 2014, has introduced concept of "material" RPT and also the requirement for seeking approval of shareholders by special resolution for such cases.<br/><br/>The transaction in question is not a "material" transaction. Accordingly, no approval of shareholders / disclosure is required.<br/> <br/>It is also important to note that the loan has been extended for 2 years at floating rate of 3% plus LIBOR. The return from the said facility is benchmarked with return of similar rated instruments and is higher than returns the Company was earning from the deposits." | |
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