Sebi okays Vedanta's open offer to Cairn India shareholders
05 Apr 2011
The Securities and Exchange Board of India (Sebi) on Tuesday approved an open offer by Sesa Goa Ltd to minority shareholders of Cairn India relating to the acquisition of 20 per cent shares in the company. Sea Goa is part of Vedanta Resources.
The union cabinet is expected to take a decision on the fate of Vedanta's $9.6 billion acquisition of Cairn India on Wednesday. (See: Cabinet move on Cairn-Vedanta deal likely tomorrow; oil ministry remains unhappy)
The deal, announced last November, ran into opposition from state-owned energy major Oil and Natural Gas Corporation (ONGC), which has a 30 per cent stake in Cairn's onshore fields in Rajasthan.
ONGC wants the government to rectify the terms of the contract with Cairn, in which the former ends up paying 100 per cent royalty for the oil, despite a 30 per cent stake in the field. India had offered the 'royalty holiday' scheme to Cairn as part of its package to encourage international energy majors to explore for oil in the country.
''We have already received Sebi's approval for an open offer,'' Anil Agarwal, the UK-based NRI businessman, and head of Vedanta, said on Tuesday. ''The issue will open very soon.''
Agarwal was also confident that the Indian government would clear his proposal to acquire majority stake in Cairn India. ''We have a deadline of April 15 and I believe the government will give its approval before that,'' said Agarwal.