Mumbai: The Indian unit of Edinburgh-based Cairn Energy Plc has sought shareholders approval to raise up to $1 billion (Rs4,050 crore) overseas, through an offering of convertibles or shares.
Cairn India Ltd , which is developing an oil field in the western state of Rajasthan, said in a notice to shareholders the foreign issue could be an offer of global or American depositary receipts or convertible bonds.
The proposal, posted on the company’s Web site www.cairnindia.com, will be moved for approval at an annual general meeting of shareholders in Mumbai on 20 September.
A company spokesman could not immediately comment, but chief financial officer Indrajit Banerjee was quoted by the Hindustan Times newspaper as saying the proposal was an enabling resolution for the company’s future needs.
“There is enough cash with us for the Rajasthan project and we do not need to raise equity capital in the immediate future,” Banerjee told the paper.
“We have $600 million of cash, which will take care of our Rajasthan project. We also have a $850 million bank line for debt in place,” he said.
On Tuesday, Cairn said it had got approval for a pipeline critical to exploiting its Rajasthan fields and was confident of getting federal nod to recover the cost of the $780 million project from the field’s revenues.
The company, in which Malaysia’s Petronas owns 10%, has targeted peak production of 150,000 barrels a day from the Rajasthan block, which is expected to produce oil for 25 years, 2009 onwards.
By 0615 GMT, Cairn shares were trading 0.3% up at Rs159.50 in line with a firm Mumbai market