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Cairn India extends loan of $1.25 billion to Vedanta for 2 years

24 Jul 2014 Evaluate

Cairn India has extended a loan of $1.25 billion (around Rs 7,500 crore) to its parent company -- Vedanta -- for a two-year period as a part of the former’s treasury operations. The company had already given Vedanta $800 million of the total loan committed while the balance would be disbursed in the coming quarters

According to the loan agreement, Cairn India will get interest of 300 basis points above the benchmark London Interbank Offered Rate. The interest rate is broadly in line with the CDS rate for its parent. This also means that the company has loaned out a substantial part of its USD-denominated deposits.

Meanwhile, the company’s net profit has declined 67.63% at Rs 643.81 crore as compared to Rs 1989.12 crore for the quarter ended June 30, 2013. Its total income has decreased by 4.64% to Rs 2764.82 crore for the quarter under review from Rs 2899.55 crore for the corresponding quarter of the previous year.

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