Cairn Energy sells 3.5% stake in Indian arm

Firm had sold controlling stake to Vedanta last year, with this move its holding is down to 18.3%

UK's Cairn Energy, which had last year sold majority stake in its Indian unit to mining group Vedanta, today sold 3.5% for over Rs 2,000 crore in an open market deal.

It had 21.8% stake in Cairn India before today's deal.

Cairn Energy sold 6.67 crore shares, or 3.5% of the Indian company's equity, for about $360 million (over Rs 2,000 crore), the company said in a press statement here.

The Edinburgh-based firm had in the run up to seeking government approvals for selling 40% of its stake in Cairn India to Vedanta claimed that it will retain about 22% interest in the company to give it "the strength and flexibility to explore new opportunities for delivering transformational growth".

But in less than a year from receiving all approvals, the company has decided to sell off all its shareholding in Cairn India and exit the country.

"At the General Meeting of the company held on May 17 2012, shareholders authorised the Board to dispose of all or part of Cairn's residual interest in Cairn India," the statement said.

Cairn Energy said it "has reached an agreement with Citi to complete an on-market sale of a total of 66,758,864 shares in Cairn India, representing approximately a 3.5% shareholding in Cairn India".

Following the sale, Cairn Energy retains an about 18.3% shareholding in Cairn India.