Cairn cuts price tag of Vedanta deal by Rs 2,900 cr | business | Hindustan Times
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Cairn cuts price tag of Vedanta deal by Rs 2,900 cr

NRI billionaire Anil Agarwal’s promoted Vedanta Resources on Monday announced renegotiating its $9.6 billion (Rs 43,200 crore) deal with the Scottish oil and gas explorer—Cairn Energy for purchasing a majority stake in Cairn Plc’s Indian oil and gas assets that includes the producing oil field in Rajasthan.

business Updated: Jun 28, 2011 00:09 IST
HT Correspondent

NRI billionaire Anil Agarwal’s promoted Vedanta Resources on Monday announced renegotiating its $9.6 billion (Rs 43,200 crore) deal with the Scottish oil and gas explorer—Cairn Energy for purchasing a majority stake in Cairn Plc’s Indian oil and gas assets that includes the producing oil field in Rajasthan.

Under the re-negotiated deal announced on Monday, Cairn has agreed to lower the price for sale of its 40% stake sale in Cairn India to Vedanta Resources for Rs 355 per share as against the earlier agreed price of Rs 405 per share.

Vedanta and Cairn said in two statements they had agreed to remove the non-compete provision and a related fee of Rs 50 per share, thus cutting the deal’s price tag by $648 million (Rs 2,916 crore).

“The total consideration payable for the 40% stake in Cairn India will now be reduced from $6,651 million to $6,023 million,” Vedanta said in a statement.

As part of the changes, the deal will complete in two tranches, with Vedanta buying an initial 10% stake on or before July 11. This will add to shares bought through an open offer and from Malaysia’s Petronas, lifting Vedanta’s stake in Cairn India to 28.5 %.

Vedanta will acquire the remaining 30% stake it has agreed to buy once it has necessary consents and approvals from the Indian government.

“Vedanta believes this initial 10% purchase is a further demonstration of its commitment to India,” chairman Anil Agarwal said.

Cairn Energy agreed last August to sell a majority stake in Cairn India to Vedanta in a deal worth up to $9.6 billion but it has been held up over issues with state-run oil and gas explorer ONGC, which has a 30% holding in the Cairn-operated fields in western India, but pays 100% of the royalties.