Cairn hopeful on deal
London-based Cairn Energy Plc said on Monday that while it expects that its $9.6 billion deal with Vedanta Resources will get completed by the end of this fiscal, it will explore other possibilities if the deal faces any undue clearance hurdles. Anupama Airy & Sandeep Singh report.business Updated: Oct 12, 2010 00:58 IST
London-based Cairn Energy Plc said on Monday that while it expects that its $9.6 billion (about R42,800 crore) deal with Vedanta Resources will get completed by the end of this fiscal, it will explore other possibilities if the deal faces any undue clearance hurdles.
“If for whatever reasons things change, then we still own 62 per cent in the company and we can look at sort of possibilities,” the Cairn Energy CEO Bill Gammel told Hindustan Times.
Cairn Energy and Vedanta Resources are awaiting approvals from the Indian government and the capital markets regulator Securities and Exchange Board of India (SEBI).
The deal was announced on August 16 under which Vedanta Group will buy up to 60 per cent of Cairn India Ltd for $9.6 billion. Cairn Energy holds a 62.36 per cent in its Indian unit, of which Vedanta Resources will buy 40-51 per cent. Vedanta subsidiary Sesa Goa has filed papers for an open offer for an additional 20 per cent stake.
Sesa Goa’s open offer was to have opened on Monday, but has been delayed due to lack of approval from SEBI.
Vedanta Group Chairman Anil Agarwal said the open offer price for Cairn India’s minority shareholders is the final price and the company is not looking at any revision in the offer price of Rs 355 per share.
“We have given a very lucrative offer and that offer we stand by,” said Agarwal, who said he expects to get regulatory approval in a few days.
Sesa Goa’s Rs 355 per share offer price is Rs 50 less than what Vedanta is paying Cairn Energy for the majority stake.
The group is offering Cairn Energy R405 a share, which includes a fee for not competing with it in India, Sri Lanka and Bhutan for the next three years.
“Non-compete fee (of R50 per share) is very important for us because we do not want Cairn Energy Plc to work in our areas,” Agarwal said.
Both Cairn Energy Plc and Vedanta Resources made it clear on Monday that they will not pick up the royalty tab, presently being borne by state-owned ONGC for the Rajasthan oil fields. ONGC is the 30 per cent partner along with Cairn in the country’s biggest onshore oil field in Rajasthan.
First Published: Oct 11, 2010 21:39 IST