‘The entire idea is a more efficient capital structure’

By sweetening the deal for minority shareholders of Cairn India, the boards of both Vedanta and Cairn are now hoping for a smooth sail of their merger plan, announced a year before. TOM ALBANESE, chief executive officer of Vedanta, speaks to Aditi Divekar

Now that your road smoothens for merger, the new entity will have access to Cairn India's cash. Is there any concrete capital expenditure plan for the metals and mining segments? Have you put any segments on priority for expansion?

The entire idea of merger is to have a more efficient capital structure, which will lead to having a better balance and, in the long term, help the company in stronger re-rating. However, in the metals business we will give priority to the aluminium, iron ore and power businesses and also look for exploration opportunities of any metals.

Would you now look for the next level of consolidation by way of sale of residual stake by the government in debtfree and cash-rich Hindustan Zinc?

We are happy to have the Government of India as stakeholder there. The zinc business is doing very well and the government is happy to keep its stake; there seems to be no disinvestment plan from their side. However, in future, if the government wishes to consider divestment, we would be happy to talk. As on today, we respect their presence.

What happens to the stake of Cairn India in Vedanta after the merger?

From a non-financial perspective, they effectively get cancelled.

Do you have plans to grow inorganically? You have presence in almost all base metals -- any plans to enter the steel industry?

We are always looking for opportunities to grow. If there is any right opportunity, we will look at it. It is a continuous process. Simultaneously, we will focus on improving the quality of our assets and look at ways of reducing costs in the metals and mining businesses.

Will Cairn India get the desired attention after merger? How do you see the future of your oil & gas business?

We will continue to invest in our existing assets to increase production and also ramp-up our gas project. Alongside, Cairn India will look for new opportunities onshore and offshore of India. Currently, the Cairn geologist team is quite engaged is collecting the relevant data.

“THE ENTIRE IDEA OF MERGER IS TO HAVE A MORE EFFICIENT CAPITAL STRUCTURE, WHICH WILL LEAD TO HAVING A BETTER BALANCE AND, IN THE LONG TERM, HELP THE COMPANY IN STRONGER RE-RATING” ON CAPEX PLAN FOR THE METALS AND MINING SEGMENT “WE WILL CONTINUE TO INVEST IN OUR EXISTING ASSETS TO INCREASE PRODUCTION AND RAMP-UP OUR GAS PROJECT. ALONGSIDE, CAIRN INDIA WILL LOOK FOR NEW OPPORTUNITIES ONSHORE AND OFFSHORE OF INDIA” ON ATTENTION CAIRN INDIA WILL GET POST MERGER