Cairn to sell 51% in Indian unit to Vedanta by Apr 15

Edinburgh-based Cairn Energy Plc today said it expects to conclude a $8.48 billion deal to sell up to 51 per cent stake in its Indian unit to mining company Vedanta Resources Plc by April 15 this year.

"Cairn continues to work with the Government of India to secure the necessary consents and approvals for completion of the proposed transaction with Vedanta. Cairn currently expects to conclude the transaction before April 15," Cairn Energy CEO Bill Gammell said in the statement.

While Cairn made the statement in quarterly 'Operational Update', London-listed Vedanta silent on the proposed deal in its third quarter financial results announced today.

Vedanta's October-December earnings announcement that ran into six pages did not mention a word on the proposed deal with Cairn, a clear departure from its earlier practice where it gave guidance of likely dates for conclusion of the transaction.

The proposed transaction, where Vedanta is to acquire 40-51 per cent stake in Cairn India for up to $8.48 billion, is awaiting government approval. The government has put stringent conditions for giving its nod.

"Completion of the proposed transaction with Vedanta will provide the (Cairn) with the funding to continue an active programme offshore Greenland, consider other opportunities and return a substantial proportion of the proceeds to shareholders," Cairn said today.

Cairn said its shareholders at the company's general meeting on October 7, 2010, voted "overwhelmingly in favour (99 per cent) of approving the proposed part sale of Cairn's shareholding in Cairn India to Vedanta".

"At the Vedanta general meeting held on December 13, 2010, shareholders voted overwhelmingly in favour (97.35 per cent) of approving the proposed transaction," Cairn added.

Cairn India, in which Cairn Energy holds 62.38 per cent stake, has completed more than one year of successful production from the Mangala oil field in the prolofic Rajasthan block, the company's main property in India.

The field is currently producing 125,000 barrels of oil per day, it said.

Cairn India is progressing on developing Bhagyam, the second biggest oil discovery in the Rajasthan block, and has commenced drilling 11 wells.