Treading cautiously, Cairn Energy and Vedanta Resources while extending the May 20 deadline to complete the stake sale deal, have not set any new date.

This is the second time the two companies are extending the deadline as they had not got the Government's nod.

Earlier, the deadline was extended from April 15 to May 20.

The fate of the deal is dependent on the Group of Ministers (GoM), which is expected to meet on May 27.

The Cabinet Committee on Economic Affairs (CCEA) in its meeting on April 6 had referred the matter to a GoM.

Keenly watched

Given the high stakes involved, the proposed deal has been attracting attention on whether the transaction will go through with or without strings attached.

“Decision in the first meeting of GoM is very unlikely,” industry watchers said.

Those involved are not only Cairn-Vedanta, but also public sector ONGC, which is Cairn's partner in majority of its oil and gas acreages in India including the prolific Rajasthan oilfields.

Edinburgh-based Cairn Energy Plc, in an interim management statement issued before its annual general meeting held in London on Thursday, said that “the two companies (Cairn Energy and Vedanta Resources) have agreed to extend the closing date of their sale and purchase agreement in order to secure the necessary consents and approvals from the Government of India to complete the transaction.”

Last August, Cairn Energy and Vedanta announced a deal according to which Cairn Energy proposes to sell a maximum 51 per cent stake in Cairn India to Vedanta for up to $8.48 billion.

The statement also said that Vedanta through its subsidiary Sesa Goa Ltd has acquired 155 million Cairn India shares, representing 8.1 per cent of the share capital, through an open offer.

The open offer closed on April 30.

Further, Sesa Goa has also acquired 10.4 per cent in Cairn India from Peteronas International Corporation Ltd taking its total holding in the company to 18.5 per cent.

Cairn Energy and Vedanta have agreed that, for the purposes of the formula set out in the Share Purchase Deed entered into last August these shares (Petronas shares) will all be treated as if they had been acquired in the open offer, the statement said.

Accordingly, on completion of the transaction, Cairn Energy will sell a stake in Cairn India to Vedanta equivalent to 40 per cent of the share capital, the statement added.

Following this Cairn Energy will hold 21.7 per cent interest in Cairn India.

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