Vedanta-Cairn deal: Sebi seeks fresh clarifications

The Securities and Exchange Board of India (Sebi) has sought fresh clarifications on the proposed $9.6-billion Vedanta-Cairn deal, which is awaiting clearance from the market regulator for about six months now.

The Vedanta group had sought Sebi’s approval in August, 2010 for a Rs 13,160-crore open offer to buy up to 20 per cent stake from the public, as part of the overall deal.

According to sources, Sebi has asked for more clarifications from the merchant banker involved in the planned Cairn-Vedanta deal. It could not be ascertained what the new clarifications being sought by Sebi are. Earlier, Sebi’s clearance was sought by Vedanta group firm Sesa Goa, through its merchant banker JM Financial.

As part of the deal announced in August, 2010, Vedanta group agreed to acquire up to 60 per cent stake in Cairn India from its Edinburgh-based promoter Cairn Energy and public shareholders. This included an open offer to buy 20 per cent stake from the public, at a price of Rs 355 per share, totalling Rs 13,160 crore.

The open offer, which was initially scheduled to begin on October 11, 2010, and close on October 30, has been stuck for a long time, given the delay in Sebi’s clearance. The regulator had earlier asked for more details on issues like open offer price and the necessary clearance to the deal from the petroleum ministry and ONGC. Sebi had also sought clarifications on various media reports about the deal.

Cairn India is a three-way joint venture between Cairn, ONGC and Malaysia’s Petronas. Currently, Cairn Energy holds a stake of 62.37 per cent in Cairn India.

Last week, Oil Secretary S Sundareshan had said that the Centre is likely to take a decision on the Cairn-Vedanta deal in the next few weeks, and that the decision would be taken on merits.