Malayasia’s state-owned Petronas is picking up a 12.7 per cent stake in Cairn India (CIL), the Indian arm of Canadian oil and petrochemicals company Cairn Energy.
The stake, valued at Rs 2,103 crore ($516 million) would help fund Cairn’s commercial oil production target from Rajasthan, according to an official Cairn release.
Cairn India is currently prospecting in 11 blocks in India, including two deepwater blocks, said Indrajit Banerjee, chief financial officer (CFO), CIL. “We are at various stages of prospecting in all these blocks and the proceeds would go into these fields,” Banerjee added.
“The company is confident of producing first commercial oil from Rajasthan in 2009. The private placement would help the Company towards meeting its investment plans and provide greater financial and operational flexibility,” Rahul Dhir, chief executive of CIL was quoted in the release.
The company is also placing around 2.6 per cent of its total equity to Orient Global Tamarind Fund Pte Limited, a Singapore-based private equity fund with investments in Indian companies including Yes Bank.
The buyers would get (CIL) shares at Rs 224.30 per share, a 0.46 per cent premium to the average closing price on the National Stock Exchange on Thursday and Friday.
The investors together would hold a total of 113 million shares of (CIL) after the placement.