Mumbai: Oil explorer Cairn India said on Wednesday it had received approval from its shareholders to accept conditions imposed by the Indian government necessary to clear Vedanta Resources’ deal to buy a 40% stake in the company.
The approval moves the long-delayed stake sale, one of the largest in India’s energy sector, closer to conclusion. Cairn will now await a no-objection certificate from joint venture (JV) partner Oil and Natural Gas Corporation (ONGC) for concluding the deal. “Shareholders have approved through postal ballot, the ordinary resolution for acceptance of the conditions imposed by the Government of India,” Cairn India said in a statement.
The resolution was carried with 97.3% of the shareholders votes.
India had granted conditional approval in June to London-listed miner Vedanta Resources to purchase the stake in the Indian business of British oil explorer Cairn Energy, in a deal valued at around $6 billion.
But conditions imposed on the sale by India include an undertaking from Cairn India that it and state-controlled ONGC will share the burden of royalty payments which are currently only paid by ONGC. The transaction has been held up for over a year mainly over the disagreement on royalty payments, undermining investor sentiment in Asia’s third-largest economy.
Cairn Energy currently holds about 52% in Cairn India, while the Vedanta group holds 28.5%.
Last month, Cairn Energy’s chief financial officer Jann Brown said the company expects to finalize the sale by the end of September.