Vedanta Group firm THL Zinc Ltd has sought a rollover of a controversial $1.25-billion (approximately Rs 8,315.9 crore) loan taken from the conglomerate's cash-rich oil explorer Cairn India in July 2014.

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The loan, which was extended for two years at floating rate of 3% plus LIBOR, was to be repaid by July 2016.

"CIHL (Cairn India Holdings Ltd), which is a 100% subsidiary of Cairn India, has received a request from THL Zinc for the rollover of the loan and a sub-committee comprising two independent directors have been constituted to review the said rollover request," Cairn India CFO Sudhir Mathur said in an investor call, transcript of which was made public on Friday evening.

The loan had become controversial in 2014 as Cairn had not disclosed extending of loan to its new parent Group. It came to light only in the analyst call in July 2014 but not before $800 million out of the total loan of $1.25 billion had already been disbursed.

Mathur said the committee of independent directors "would be going into the details of this rollover request and we will get back to you one way or another what decision of the directors is."

In September 2015, London-listed Vedanta Resources Plc, the parent firm of Vedanta, said the $1.25-billion loan was used to repay $800 million of principal and $450 million in interest on another inter-company loan.

In June last year, it proposed merging Cairn India with Vedanta Ltd. If the proposed merger goes through, it could mean that the $1.25 billion loan is written off.

When an analyst asked if cash reserves can be lent to the promoters without going to minority shareholders, he said, "I think there was no law which prevented this loan from being given."

Under the new Companies Act, companies need to take shareholder nod for related party transactions.

Mathur said the independent directors committee would seek advice on all these elements.

"They would be going into details of this extension, this rollover terms to be changed if any. We will get back to you one way or the other," he said.

Mathur, however, did not say Vedanta is seeking rollover for how many years.

Asked if the parent group has sought additional loan, he said, "There is no request and we do not foresee any request for incremental loan."

Cairn had a cash balance of Rs 19,500 crore at the end of March 31, 2016.

In 2014, it had used its cash to buy back shares that helped Vedanta gain greater control of the firm. It bought 36.7 million shares for Rs 1,225 crore and extinguished them, resulting in promoter shareholding rising from 58.76% to 59.90%.

Vedanta group shareholding would have gone up to 64.53%, had Cairn been able to buy all the 170.9 million share it had intended to buy back for up to Rs 5,725 crore. It could not as Cairn share traded higher than Rs 335 offered.

Mathur said, "All the interest (on the $1.25 billion loan) that was to received from THL Zinc has been received."