Thaindian News

Mumbai, Dec 8 (IANS) British oil explorer Cairn Energy Thursday said it has completed with Anil Agarwal-promoted Vedanta Group the transaction for the sale of 40 percent of its stake in the India subsidiary.

“I am delighted to announce completion of this transaction,” said Simon Thomson, chief executive, Cairn Energy.

According to a regulatory filing, Cairn has received $4.1 billion for the sale of 30 percent stake in its India subsidiary to Vedanta. Earlier, the company had sold 10 percent stake to Vedanta for about $1.4 billion.

“Our remaining 22 percent shareholding in Cairn India, retained cash and balance sheet strength provide financial flexibility and an excellent platform for future growth opportunities,” it said.

The company proposed to return approximately $3.5 billion of the sales proceeds to shareholders.

“The return of cash is expected to be made in a manner that will provide shareholders with an element of choice as to when and in what form they receive the cash. A further announcement will be made in due course,” it added.

Vedanta company Sesa Goa earlier said it had raised its stake in Cairn India by 20 percent. The Group now owns 60 percent of Cairn India.

On Wednesday, Cairn India said Vedanta had completed all the conditions of the sales and purchase agreement.

“Vedanta has confirmed that it has now satisfied the conditions under the sales and purchase agreement for the acquisition of a controlling shareholding in Cairn India,” the company said in a regulatory filing Wednesday.

The deal was finally sealed after the home ministry Tuesday gave its approval to the security no-objection certificate (NOC) to the deal.

The NOC was one of the conditions that the government had set for the Vedanta Group for buying the 40 percent stake in Cairn India from its parent company Cairn Energy Plc.

Both the companies had earlier agreed to other conditions of Cairn India paying cess and royalty on crude oil produced from its Rajasthan oilfields.

The transaction was delayed since August last year due to a disagreement between Cairn India and its partner, the state-owned Oil and Natural Gas Corp (ONGC), over royalty payments.

On Sep 28, ONGC gave its approval to Vedanta Group buying the India assets of Britain-based Cairn Energy, a deal worth about $9 billion.

ONGC’s approval came almost two months after the government gave its nod to the transaction. Cairn has already sold 10 percent stake in the Indian subsidiary.

Cairn Energy became a major player in India’s energy space after its huge oil find in Barmer, Rajasthan, in 2007.

The average crude oil production from Mangala oilfield in the Barmer block is currently over 44,300 barrels per day (bpd) and is in the process of being ramped up to the plateau rate of 125,000 barrels.

The block is estimated to hold reserves of 6.5 billion barrels of energy equivalent.