Mining conglomerate Vedanta Resources has completed the purchase of a 10 per cent stake in Cairn India from Cairn Energy, taking its total stake in the company to 28.5 per cent. "Cairn has completed the sale of 191,920,207 Cairn India shares to Vedanta, representing 10 per cent of the fully diluted share capital of Cairn India, for net proceeds of around $1,362 million in cash," the company said in a release to stock exchanges. Cairn Energy will sell another 30 per cent of its interest in Cairn India "subject to the necessary consents and approvals from the government of India," the statement said. These shares have been purchased at Rs 355 per share.
Vedanta's Indian subsidiary, Sesa Goa, had earlier bought 155 million Cairn India shares, representing 8.1 per cent of the share capital, in an open offer. Further, Sesa has bought a 10.4 per cent stake from Petronas International Corp of Malaysia. With yesterday's purchase, Vedanta now has 28.5 per cent stake in Cairn India.
In a separate statement, Vedanta said it "continues to work with Cairn Energy to secure the necessary consents to complete the purchase of a further 30
Cairn Energy is still majority shareholder of Cairn India, with a 52.2 per cent shareholding.
In August 2010, London Stock Exchange-listed Vedanta had announced a plan to buy up to 60 per cent stake in Cairn India.
But the Indian government held back its approval, as it wanted Cairn to first settle long-pending issues of royalty payment with government-owned Oil and Natural Gas Corporation and a tax arbitration case against the government.
Following this, Cairn Energy had to forego the Rs 50 per share non-compete fee that Vedanta had earlier agreed to pay it while the open offer price was Rs 355.
The government has recently given conditional approval to this deal, wherein both Cairn and Vedanta will have to agree to royalty from Cairn's Barmer block being taken as 'cost-recoverable'.
