Vedanta sure of Cairn deal going through
Amidst Oil Ministry taking Vedanta Resources' acquisition of Cairn India to the Cabinet for approval, the London-listed mining group on Friday said the $9.6 billion will go through.business Updated: Feb 25, 2011 21:18 IST
Amidst Oil Ministry taking Vedanta Resources' acquisition of Cairn India to the Cabinet for approval, the London-listed mining group on Friday said the $9.6 billion will go through.
Vedanta Chairman Anil Agarwal on Friday met Oil Secretary S Sundareshan to discuss the approval process.
"This was a courtesy call... The meeting was very constructive and we look forward to a positive outcome," he said after the 20 minute meeting.
The oil ministry has set 11 pre-conditions, including addressing the issue of royalty that Oil and Natural Gas Corp (ONGC) pays on behalf of Cairn, in the giant Rajasthan oil fields.
"We are evaluating the pre-conditions," Agarwal said without elaborating. "The deal must go through," he added.
Oil Minister S Jaipal Reddy said his ministry was attempting to get a decision on the deal as quickly as possible.
"Our idea is to take to Cabinet as quickly as possible. We have already circulated Cabinet note," he said, without giving a time frame by when the issue will be considered.
Vedanta is buying 40-51% stake from UK's Cairn Energy and is expecting to close the deal by April 15.
It has to make an open offer for buying an additional 20% from minority shareholders of Cairn India, a process that would take a minimum of 30-35 days to complete.
Vedanta is hoping that once it gets a favourable decision from the Cabinet, it would go to its shareholders to extend the April 15 deadline.
State-owned ONGC not just pays royalty on its 30% share but also on Cairn India's 70% share in the Rajasthan fields. ONGC and the oil ministry want the royalty to be equitably shared.
Cairn and Vedanta are both opposed to footing the royalty bill.