Cairn India has extended the repayment period of its $1.25-billion loan to its group company by two years.
Cairn India Holdings Limited (CIHL), an overseas subsidiary of Cairn India Limited, has decided to extend maturity of the loan of $1.25 billion, which was given for a term of two years in May, 2014, to THL Zinc Limited (TZL), an overseas subsidiary of Vedanta Limited, for a further period of two years, the company said in a filing to the BSE.
"The extension is on arm's length at a revised rate of interest of LIBOR + 450 bps in the first year and at LIBOR + 475 bps in the second year (compared to the existing rate of LIBOR + 300 bps) and is on terms that are market standards including change of control provisions and will continue to be secured by a guarantee from Vedanta Resources Plc."
The return from the said loan will provide higher yield to CIHL compared to the return it is earning from its existing investments out of its cash and cash equivalents, which are in US dollar, the company said.
TZL is the holding company of the Vedanta Group's international Zinc business, with assets in South Africa and Namibia.
Cairn India reported a historic quarterly loss of Rs 10,948 crore last month for January-March 2016. It also undertook an impairment of Rs 11,674 crore for the full year ending March 31, 2016. The continued fall in crude oil prices has pulled down Cairn India performance.
The Vedanta Group company closed 2015-16 with a loss of Rs 9,432 crore and a normalised profit after tax of Rs 2,145 crore, compared to Rs 4,480 crore profit the previous year. The company had also taken an impairment of Rs 505 crore last year in the fourth quarter on account of its Sri Lankan assets.
The company’s realisation was down 42% to $28.2 per barrel of oil equivalent compared to quarter ending March 31, 2015. It was almost $41 for 2015-16, a 46% fall over previous year.
The net revenue for January-March 2016 was Rs 1,717 crore less 36% over Rs 2,677 crore previous year. On yearly basis, revenue is Rs 8,626 crore down 41% to Rs 14,646 crore. EBITDA dropped 60% to Rs 3,505 crore with an EBITDA margin of 41%. The company, however, said, “A favourable movement in rupee of 6% depreciation versus US dollar resulted into a forex gain of Rs 714 crore on investment and operating activities.”
During FY16, Cairn had a gross production of 74.6 million barrels of oil equivalent across all assets of which its share was 46.9 mmboe.
Source: Business standard