Cairn Energy being paid a premium for its non-compete pact, says Anil Agarwal.
“Being a democratic country, there is a process involved which take time. Though we cannot put a timeline on the deal, we are confident it will go through.”
Suresh P. Iyengar
Mumbai, Oct. 11
London-based billionaire business man Mr Anil Agarwal, Chairman, Vedanta Resources plc, is in the thick of action. All his India plans seem to have hit hurdles. In an interaction with the Business Line , Mr Agarwal took time to clear misgivings and was confident that things will fall in place soon.
Your business interest in Orissa and Tamil Nadu seems to be facing resistance after your unexpected deal with Cairn Energy. Do you see a design?
It is just a coincidence and things will be back to normal in both Orissa and Tuticorin. Our plant in Tuticorin is in operation since last 25 years. The High Court verdict was on a 15-year-old case and we were making our submissions all along. We have obtained some relief from the Supreme Court. But, I do not want to dwell on it more as it is sub judice. We are hopeful that justice will be done soon as the livelihood of over 15,000 workers are at stake. As far as Orissa is concerned, we have stopped expansion till such time we get a clear signal from the Government. Mr Rahul Gandhi was at Lanjigarh and he was not against the project as such. He had expressed his concern over the tribals development and we are closely working with the tribals as well. As a matter of fact, we appreciate the Government concern on tribals' development.
How soon do you expect to wrap up the deal with Cairn Energy?
We had met the Petroleum Minister and senior officials of his Ministry as well as the ONGC Chairman recently in London. The intricacies of the deal were discussed in detail. The Government was upset that they were kept in the dark till the deal was announced through media. We explained that it was not our intention to do so. Being a democratic country, there is a process involved which take time. Though we cannot put a timeline on the deal, we are confident it will go through.
The market feels that you are paying a higher price for the Cairn oil assets in India. What is your thought?
In the London market, no asset sale happens without 20-25 per cent premium. In this deal with Cairn, we had paid a premium of 20 per cent. Moreover, the deal was a stepping stone for our entry into a new business in one of the fast growing economies.
Investors seem to be upset with the differential price being paid to them and Cairn Plc. Will you revise the offer price higher?
No. We have offered the best price possible to investors. Cairn Energy is being paid a premium for its non-compete agreement. The offer price is lucrative considering the price at which Cairn India offered its share through the IPO.
You were negotiating with the Government to buy their residual stake in Hindustan Zinc and Balco. What is the latest?
The arbitration process is over and we are waiting for the award (final decision) from the Government soon. The award will indicate the price at which the Government wants to sell off its stake to us.Related Stories:
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