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Vedanta sticks to Cairn deadline

business Updated: May 05, 2011 21:09 IST

Agencies
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Vedanta Group, promoted by NRI billionaire Anil Agarwal, on Thursday said the government should not link the royalty payment issue to its consent for the plan to acquire majority stake in Cairn India.

“We expect that the government would not link royalty issue with the deal,” Vedanta chairman Anil Agarwal said in London, adding, “it is a clear deal between two companies — Vedanta Resources and Cairn Energy Plc.”

He was responding to queries in an investor call after announcing the financial results of the company. The group posted a 28% rise in full-year attributable profit to $770.8 million, on the back of a 44.1% rise in revenues to $11.4 billion. The company had reported a profit of $602.3 million in 2009-10.

Moreover, the company also expressed confidence that the deal would be closed “as soon as possible” and said it would acquire 58.5% stake in Indian arm of Edinburgh-based Cairn Energy Plc for $9.4 billion, post completion of the open offer by its subsidiary Sesa Goa.

“We would be happy to close this transaction as soon as possible. The government has set up a body to evaluate this transaction,” Vedanta CEO MS Mehta said in the investor call.

Both the firms — Cairn Energy Plc and Vedanta Resources — have set a deadline to rap up the deal by May 20, after extending the initial deadline of April 15.

Vedanta Resources, through its subsidiary Sesa Goa, currently holds 18.5% stake in the Cairn India and has tied up funds to the tune of $6 billion to acquire another 40% stake from Cairn Energy.

The company purchased 10.4% stake in Cairn India from Malaysian firm Petronas at R331 per share last month, paying over R6,620 crore, while it managed to get 8.4% stake through open offer for about R5,503 crore.

Last month, the Cabinet Committee on Economic Affairs had referred the Cairn-Vedanta deal, announced in August, 2010, to a group of ministers (GoM) headed by finance minister Pranab Mukherjee as there were sharp differences over the conditions to be set for giving its approval.