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Vedanta to seek shareholder nod next month

Sources close to the development also said the Anil Agarwal-led company is likely to call for a shareholders meet in December, seeking approval for the $9.6-billion Cairn deal.

twitter-logoPTI | November 25, 2010 | Updated 14:07 IST

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 a circular convening a shareholders meet in third week of December, sources privy to the development said.

Vedanta, which is buying about 51 per cent stake from UK's Cairn Energy Plc, also hopes to get market regulator Securities and Exchange Board of India's (Sebi) nod for acquiring an additional 20 per cent stake from minority shareholders of Cairn India by December-end. It may launch an open offer in early part of January next year.

Sources said 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 November 19 said 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 if the government nod were to come by February-end or even in March, it would be well within the April 15 deadline next year, set by Cairn and Vedanta for closure of transaction.

Cairn Energy, which had last month secured shareholders' nod for selling most of its 62.38 per cent 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 per cent 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.

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