Cairn-Vedanta: The story so far

Cairn-Vedanta: The story so far

The Cabinet Committee on Economic Affairs (CCEA) referred Vedanta Resources’ proposed $9.6 billion (Rs 42,430 crore) purchase of a stake in Cairn India to a ministerial panel.

Approval from the government is crucial for completion of the biggest acquisition in the Indian oil sector and could help boost investor sentiment in Asia’s third-largest economy.

India, the world’s fourth-largest oil importer, failed to woo global companies in its latest oil and gas exploration licensing round that closed last week due to its relatively weak track record of commercial discoveries and sluggish bureaucracy, with most of the 33 blocks going to domestic players.

In January, the government approved plans by South Korea’s Posco for a $12 billion steel mill after years of delay.

The following is a chronology of events in the Cairn-Vedanta deal:

07 April 2011 | • Cairn Energy and Vedanta Resources extended the deadline for a $9.6 billion deal for Cairn’s India assets, reflecting optimism a deal will get done a day after the government deferred a decision. Both companies have extended the date by which all conditions must be completed or waived to 20 May 2011 to accommodate the completion of the open offer for Cairn India shares, Cairn Energy said in a statement. Read Story

06 April 2011 | • The cabinet unanimously feels that royalty payments for Cairn India Ltd’s assets should be shared by all owners, casting fresh doubt over Vedanta Resources Plc’s acquisition of a majority stake in Cairn India in a $9.6 billion (around Rs42,430 crore) deal facing a deadline. Read Story

05 April 2011 | • Vedanta Resources expects the government to approve its long-pending deal to take control of Cairn India in the next few days, its chairman said, adding that the issue of royalty payments should be treated separately. Read Story

30 March 2011 | • In a blow to Cairn Energy, the government’s law officers have held that Edinburgh-based firm needs state-owned ONGC’s consent to sell its majority stake in Cairn India to Vedanta Resources. Read Story

28 March 2011 | • Union petroleum and natural gas minister S Jaipal Reddy has said he views the $9.6 billion Cairn-Vedanta deal royalty issue as cost recoverable, raising hopes the long-delayed transaction may go through by the companies’ target date of 15 April. Read Story

14 March 2011 | • The market regulator Sebi said on Monday it had issued “final observations" on Vedanta Resources’ open offer for Cairn India, but a source with direct knowledge said the offer had not yet been approved. Read Story

25 February 2011 | • Amidst oil ministry taking Vedanta Resources’ acquisition of Cairn India to the cabinet for approval, the London-listed mining group said the $9.6 billion will go through. Vedanta chairman Anil Agarwal met oil secretary S. Sundareshan to discuss the approval process. Read Story

18 February 2011 | • The Union cabinet will make a decision quickly on Cairn Energy’s deal to sell Indian assets to Vedanta Resources, petroleum minister S. Jaipal Reddy said, adding there was no need to worry over meeting deadlines. Read Story

17 February 2011 | • Mark to Market: Deal overhang still weighs on Cairn stock

06 February 2011 | • Oil secretary said that he was hopeful of finding a “positive solution" to Cairn India’s plans to sell a controlling stake in its Indian unit to Vedanta Resources. S. Sunderashan’s remarks are the strongest sign yet that the proposed deal, valued at up to $9.6 billion, could go through by 15 April, the target date set by both Cairn and Vedanta to seal the transaction. Read Story

02 February 2011 | • Oil regulator DGH and petroleum ministry have refused to take a stand on ONGC’s demand to recover royalty it pays on oil produced from Rajasthan block, an issue that has threatened to derail Vedanta Resources’s $9.6 billion acquisition of Cairn India. Read Story

30 January 2011 | • State-owned Oil and Natural Gas Corp (ONGC) has asked the government not to approve London-listed Vedanta Resources’ $9.6 billion acquisition of Cairn India until the issue of excess royalty it pays on Rajasthan crude oil is sorted out. Read Story

24 January 2011 | • The petroleum ministry is ready to give “in-principle" approval for Vedanta Resources’ $9.6 billion acquisition of Cairn India, provided the mining firm led by billionaire Anil Agarwal agrees to a set of 11 preconditions. Read Story

11 January 2011 | • The Prime Minister’s office (PMO) has asked oil ministry to decide on giving consent to Vedanta Resources’ $9.6 billion acquisition of Cairn India by January end, at least a month earlier than the deadline Murli Deora’s ministry had set for itself. Read Story

14 December 2010 | • Shareholders of Vedanta Resources Plc have approved the proposed acquisition of majority stake in Cairn India for up to $9.6 billion, said an official of the London-listed mining group. Read Story

13 December 2010 | • The government will take a decision by March on whether to allow UK explorer Cairn Energy’s plan to sell majority stake in its local unit to Vedanta Resources, the petroleum minister said, further delaying a key nod by a month. Read Story

05 December 2010 | • UK’s Cairn Energy has reluctantly acquiesced to the government’s view that prior consent is required for the sale of a majority stake in its Indian subsidiary to Vedanta Resources, but still maintains that partner Oil and Natural Gas Corp’s (ONGC) nod is not required. Read Story

19 November 2010 | • India-focused mining group Vedanta Resources Plc agreed a $6 billion financing deal with a consortium of banks to help fund its proposed acquisition of a majority stake in the Indian unit of Cairn Energy. Read Story

11 October 2010 | • Vedanta Resources Plc will not offer retail shareholders of Cairn India Ltd—the Indian oil and gas company it plans to acquire—the non-compete fee being paid to its current promoters, Vedanta’s chairman Anil Agarwal said. The open offer being made through group firm Sesa Goa Ltd is yet to commence in the absence of a nod from the Indian government as well as capital market regulator Securities and Exchange Board of India (Sebi). Read Story

23 September 2010 | • Anil Agarwal’s Vedanta Resources Plc has inched closer to taking control of Cairn India Ltd, a subsidiary of London-based natural resources firm Cairn Energy Plc that it is seeking to acquire for as much as $9.6 billion (Rs. 43,776 crore). A senior official of state-run Oil and Natural Gas Corp. Ltd (ONGC) disclosed that it had not made a widely-anticipated counter bid before 7 September, the deadline for such a bid. Read Story

21 September 2010 | • UK’s Cairn Energy Plc has said it will seek shareholder nod for sale of majority stake in its Indian arm, Cairn India, to London-listed Vedanta Resources Plc for up to $8.48 billion on 7 October. Read Story

15 September 2010| • Oil and gas company Cairn India Ltd will set up a committee of independent directors that will advise the management on how best to proceed with the sale of as much as 51% of the company to Vedanta Resources Plc, a plan that has been facing hurdles ever since it was announced a month ago. Read Story

07 September 2010| • The government has written to market regulator Sebi saying Cairn Energy Plc’s deal to sell majority stake in its Indian arm to Vedanta Resources does not yet have its approval, a condition contingent for the $8.48 billion deal to consummate. Read Story

24 August 2010 | • The UK-based Cairn Energy on Tuesday said it will seek government’s endorsement and necessary consent for selling its majority stake in Cairn India to London-listed Vedanta Resources for $8.48 billion. Read Story

23 August 2010 | • Vedanta Resources Plc’s proposed acquisition of a majority stake in Cairn India Ltd for as much as $9.6 billion (Rs44,736 crore) may be scuppered by the ministry of petroleum and natural gas, which wants the oil explorer to offer state-owned Oil and Natural Gas Corp. Ltd (ONGC) a chance to buy the stake. Read Story

18 August 2010 | • There may be a fresh twist to Vedanta Resources Plc’s plans to acquire a majority stake in Cairn India Ltd, if state-run Oil and Natural Gas Corp. Ltd (ONGC) follows through on the signal from the petroleum ministry to make a counter offer. Read Story

• A day after London-based natural resources company Vedanta Resources Plc announced that it would acquire a majority stake in oil and natural gas producer Cairn India Ltd, analysts across brokerages have expressed concern about the deal, with some saying that retail investors have been offered a bad deal and others questioning the valuation. Read Story

17 August 2010| • Regulatory hurdles could delay Vedanta Resources’ purchase of a stake of up to $9.6 billion in Cairn India, but the buyer and analysts see them as unlikely to derail the deal. Vedanta, in its first move into the energy sector, is buying a controlling stake in India’s No. 4 oil and gas company from Britain’s Cairn Energy to capitalise on rising energy demand, economic growth and an expanding population. Read Story

• Vedanta Resources sees no regulatory hurdles to its purchase of a stake of up to $9.6 billion in Cairn India, as Cairn Energy’s chairman headed to New Delhi on Tuesday to push for the deal. Read Story

Quick Edit |Defying logic

16 August 2010 | Mark to market: • An exit option for Cairn shareholders

15 August 2010 | Mark to market: • Vedanta goes down the beaten path

13 August 2010| • India-focused Vedanta Resources will buy a 51% controlling stake in Cairn India for $8 billion to $8.5 billion, a source familiar with the matter said. Vedanta Resources is in talks with Cairn Energy, which has a 62.4% stake in Cairn India, to buy a stake in the unit, both companies confirmed without giving details. Read story

12 August 2010| • Vedanta Resources is in talks to buy a stake in Cairn India that would be the diversified miner’s first move into oil and gas. Vedanta and British oil and gas company Cairn Energy, which has a 62.37% interest in Bombay-listed Cairn India, confirmed that they were in talks. Read Story