Cairn shareholders approve Cairn India stake sale

Cairn shareholders approve Cairn India stake sale

London: Vedanta’s proposed deal to buy a chunk of Cairn India came a step closer on Thursday as shareholders of parent Cairn Energy overwhelmingly approved the deal, which could be worth up to $8.5 billion.

India will decide on whether to approve the sale by the end of 2010, oil secretary S. Sundareshan told Reuters on Thursday.

A decision on the deal would need to be followed by formal approval, which could take longer.

Another Indian official said that he didn’t think state-run explorer Oil and Natural Gas Corp (ONGC) had plans to pre-empt the stake sale, after ONGC said in September it was “not passive" to the deal and commerce minister Anand Sharma said in August the company should have a say in the transaction.

“I don’t think the ONGC board has seriously considered a counter offer," the deputy to the oil minister told reporters at a briefing in London on Thursday.

Separately on Thursday, Cairn Energy investors holding 99% of the shares voted in favour of the sale of most of Cairn’s stake in Cairn India, India’s No.4 oil and gas company.

Cairn in August struck a deal with London-listed miner Vedanta Resources to sell it between 40 and 51% of Cairn India, the company it formed through spinning off its Rajasthan assets in 2007, for up to $8.5 billion.

Cairn said it will return most of the sale proceeds to shareholders and spend the rest on exploration in Greenland, where two wells have so far found evidence of oil and gas but not in commercial quantities.