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Vedanta to seek shareholder nod next month

Vedanta to seek shareholder nod next month
PTI
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First Published: Wed, Nov 24 2010. 06 24 PM IST
Updated: Wed, Nov 24 2010. 06 24 PM IST
New Delhi: London-listed Vedanta Resources may next month seek shareholders’ nod for buying majority stake in Cairn India for up to $9.6 billion.
The India-focussed group, which last week secured $6 billion debt for the acquisition, is likely to post in next few days a circular convening a shareholders meet in third week of December, sources privy to the development said.
Vedanta, which is buying 40-51% stake from UK’s Cairn Energy Plc, also hopes to get market regulator Sebi’s nod for acquiring an additional 20% stake from minority shareholders of Cairn India by December end and may launch an open offer in early part of January 2011.
Sources said that Cairn, in the next few days, would make a formal application to the government for approval of transfer control of its three properties, including the mainstay Barmer oilfields in Rajasthan, that were previously not included in the letters sent for state’s approval.
Oil secretary S. Sundareshan had on 19 November told the news agency that the government would consider approval to the Cairn- -Vedanta deal only after UK-based Cairn Energy made a formal application for transfer of control of all of its 10 properties in the country.
The government decision would take 2-3 months from the day the applications are received, he had said.
Sources said that if the government nod were to come by February-end or even in March, it would be well within the 15 April, 2011 deadline set by Cairn and Vedanta for closure of the transaction.
Cairn Energy, which had last month secured shareholders’ nod for selling most of its 62.38% stake in the Indian unit, is, however, unlikely to concede pre-emption rights to partner Oil and Natural Gas Corp (ONGC).
The Edinburgh-based firm’s current application that seeks the government’s nod for sale of 40- 51% stake in Cairn India has left out the three oil and gas producing properties: Rajasthan block, the Cambay basin gas field and the eastern offshore Ravva oil and gas fields.
Earlier this month, the Oil Ministry wrote to Cairn Energy, citing law ministry’s opinion that the British firm was contractually bound to seek government approval in all of its assets, as sale of majority stake in the Indian unit amounted to transfer of control in the properties, sources said.
Though the company looks set to concede the ground on requirement of prior government consent, it is unlikely to yield pre-emption rights to state-owned ONGC, which partners its Indian unit in most of its properties including the Rajasthan block.
The pre-emption is a natural extension of the requirement of government consent and the same has been upheld by law ministry and the Solicitor General of India, the nation’s second highest law officer, in their separate opinions on the Cairn-Vedanta deal.
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First Published: Wed, Nov 24 2010. 06 24 PM IST
More Topics: Vedanta | Cairn India | ONGC | Stake sale | Sebi |