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REGIONAL NEWS - ASIA 24 E&MJ; • MAY 2017 www.e-mj.com Vedanta Completes Cairn Merger India's metal and mineral major, Vedanta is awaiting the final nod from central bank, Reserve Bank of India (RBI) to complete the proposed merger with its energy subsidiary, Cairn India Ltd., to create the fourth larg- est resource company in the world. Vedan- ta, the Indian subsidiary of London Stock Exchange (LSE) listed Vedanta Plc has secured all approvals from its shareholders and that of Cairn India Ltd. and India's Na- tional Company Law Tribunal to effect the merger. However, the final regulatory clear- ance from RBI was necessary as the merger would involve issue of fresh non-redeem- able preference shares to non-resident mi- nority shareholders of Cairn. According to a Vedanta statement, the merger would be effective as soon as the approval for issue of non-redeemable pref- erence shares was received from the Indian central bank. "It is just a matter of a very short time that last of the formalities will be completed and the merger process be- come effective," a company source said. The revised target date for completion of the merger had been set for April 2017. The merged entity of Vedanta and Cairn India would create the world's fourth larg- est resource major after BHP Billiton, Rio Tinto and Glencore. "The strategic rationale for merging Vedanta Ltd and Cairn India remains highly compelling. Diversified re- source companies have delivered superior returns for shareholders historically. The transaction consolidates our portfolio of attractive Tier I assets and simplifies the group structure, better positioning the group to deliver superior value to all share- holders in the long term," Tom Albanese CEO, Vedanta India had said in a statement explaining the objective of the merger. The merger first proposed in 2015 had hit several roadblocks primarily from minority shareholders of Cairn India who had objected to equity share swap offered by Vedanta. In 2016, the board of Vedan- ta approved a revised and sweetened the swap ratio under which minority share- holders of Cairn India would receive one equity share and four non-redeemable preference shares of Rs 10 each face val - ue of Vedanta for every one equity share of Cairn India. Once the merger was in place, Vedan- ta Plc's equity holding in Vedanta Ltd. was expected to come down to 50.1% from 62.9% at present. Though no official announcement has been made, sources indicated that the merged entity was looking to invest $10 billion over five years in the merged company to expand its energy and mining portfolio to emerge as a stronger global diversified resource company. Cairn India currently holds seven oil and gas blocks of which sic were located in India and one in South Africa. Among the blocks in India, its primary asset was the Mangala fields in desert Indian province of Rajas- than, which was discovered in 2004 and one of the largest discoveries in a decade. Mangala together with adjacent blocks were reported to hold hydrocarbon reserves esti- mated at 2.2 billion barrel equivalent of oil. Currently, Cairn India produces 200,000 barrels of oil and gas equivalent per day and additional investments over the next few years was expected to ramp this 250,000 oil and gas equivalent per day. Vedanta's business portfolio included Sesa iron ore mines in western Indian prov- ince of Goa and one of the largest exporter of the raw material from the country, zinc smelting operations under subsidiary Hin- dustan Zinc Ltd., a 2.3 million metric ton per year aluminum smelting capacity and 9,000 MW of power generation capacity. Kingsgate Commences Claim Against Thailand Kingsgate Consolidated Ltd. will seek a range of remedies, including compensation, from the Thai Government for the measures taken against the Chatree gold mine in vio- lation of the Australia-Thailand Free Trade Agreement (TAFTA). As a first step, Kings- gate notified the Prime Minister of the King- dom of Thailand that it wishes to engage in consultations as required under TAFTA. Chatree produced 19,377 oz of gold during December 2016 and it was debt free. With the Thai Government's decision to cease all gold mining generally by the end of 2016, however, it was placed on to care and maintenance effective January 1, 2017. Over the past 11 months, Kingsgate said it has made sustained, good faith ef- forts to engage with the Thai Government in relation to the measures against the Chatree gold mine that ultimately resulted in its premature closure on December 31, 2016. "These efforts included numerous unanswered requests for meetings with Thailand's Prime Minister and members of his Cabinet," said Greg Foulis, CEO, Kingsgate. "Regrettably, Kingsgate has now reached a position where it believes that the only option to resolve the situa- tion is to exercise its rights as a protected Australian investor under TAFTA." TAFTA was signed in 2004 between Thailand and Australia to promote and improve the environment for bilateral services, trade and investment. TAFTA entered into force in 2005. TAFTA consultations can take up to three months, and failing a mutual out- come, any international arbitration pro- ceedings that may follow under TAFTA can take an undetermined amount of time to resolve. Chatree's fleet of mining equipment sits idle in Thailand.