London: Mining conglomerate Vedanta Resources Tuesday said its shareholders have approved the merger of group firms Vedanta Ltd and Cairn India.


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"Vedanta Resources announces that at its General Meeting held today, September 6, the resolution put to shareholders in relation to the proposed merger of Vedanta Ltd and Cairn India was duly passed on a poll," it said in a regulatory filing.


The development brings the firm led by billionaire Anil Agarwal a step closer to salvage merger of the cash-rich oil firm with its debt-laden parent Vedanta Ltd.


However, the real test for Agarwal is on September 12, when Cairn India has called a shareholders' meeting to seek approval for the company's takeover by its parent under a revised all-share deal.


That apart, Vedanta Ltd will also hold a meeting of its shareholders, secured and unsecured creditors on September 8 to seek their approval for the merger of Cairn India.


To save the deal, the Agarwal-led group in July sweetened the deal by offering three additional preference shares in hope of winning over minority shareholders like LIC.


Through the merger, Agarwal is looking to create India's largest diversified natural resources firm, which could compete with BHP Billiton and Vale SA.


In the revised offer, Vedanta will give minority shareholders of Cairn India one equity share and four redeemable-preference shares with a face value of Rs 10 each. The preference shares will carry a coupon of 7.5 percent and tenure of 18 months.


Vedanta is said to be wanting to use Rs 23,290 crore cash lying with Cairn to pay off part of its Rs 77,952 crore debt. It had in May rolled over a controversial USD 1.25-billion loan taken from Cairn India in July 2014.


For the merger to go through, half of the minority shareholders, who together make up for 40 percent of the Cairn equity, have to approve the deal.


State-owned LIC holds 9.06 percent in Cairn India while the company's former promoter Cairn Energy Plc of the UK has 9.82 percent interest. The deal will go through if LIC votes in favour of the deal, a source said.


Post-merger, London-listed parent Vedanta Resources Plc's holding in Vedanta will drop to 50.1 percent from 62.9 percent. Cairn India's minority shareholders will own 20.2 percent and Vedanta minority shareholders 29.7 percent in the merged entity.


In June last year, Vedanta had offered shareholders of Cairn India one ordinary share and 7.5 percent redeemable preference share with a face value of Rs 10 each.