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Vedanta buys $1.5 bn stake in Cairn India: Reports
MUMBAI: India-focused miner Vedanta Plc bought an 11 per cent stake worth about $1.5 billion in Cairn India through block deals in the market, a source said, even as Vedanta faces a delay in its $9.6 billion acquisition of the energy firm.
Shares in Cairn India rose nearly 3 per cent on the news in a broader market down 0.2 per cent.
The source familiar with the matter said Vedanta bought the stake from Malaysia's national oil corporation Petronas
, which also sold its remaining nearly 4 per cent stake to some foreign portfolio investors.
Cairn Energy agreed in August to sell a majority stake in Cairn India to Vedanta, but the deal has been delayed due to a dispute over royalty payments by Cairn India's partner, state-run Oil and Natural Gas Corp .
Vedanta's share purchase in Cairn India will help it gain a majority stake in the company even if an open offer to buy additional shares in Cairn India from minority shareholders does not see a big response.
Vedanta's deal to buy Cairn's India assets, which would be the biggest deal in the Indian oil sector, is widely seen as a litmus test for foreign investment into India.
The source said Vedanta bought the 11 per cent stake at 331 rupees ($7.4) a share, a 1.6 per cent discount to Cairn India's closing prices on Monday.
Cairn India saw 283 million shares, or 14.9 per cent of the share capital, changing hands in block share market deals on the Bombay Stock Exchange on Tuesday.
Bank of America Merrill Lynch represented Petronas in the deal.
Shares in Cairn India rose nearly 3 per cent on the news in a broader market down 0.2 per cent.
The source familiar with the matter said Vedanta bought the stake from Malaysia's national oil corporation Petronas
, which also sold its remaining nearly 4 per cent stake to some foreign portfolio investors.
Cairn Energy agreed in August to sell a majority stake in Cairn India to Vedanta, but the deal has been delayed due to a dispute over royalty payments by Cairn India's partner, state-run Oil and Natural Gas Corp .
Vedanta's share purchase in Cairn India will help it gain a majority stake in the company even if an open offer to buy additional shares in Cairn India from minority shareholders does not see a big response.
Vedanta's deal to buy Cairn's India assets, which would be the biggest deal in the Indian oil sector, is widely seen as a litmus test for foreign investment into India.
The source said Vedanta bought the 11 per cent stake at 331 rupees ($7.4) a share, a 1.6 per cent discount to Cairn India's closing prices on Monday.
Cairn India saw 283 million shares, or 14.9 per cent of the share capital, changing hands in block share market deals on the Bombay Stock Exchange on Tuesday.
Bank of America Merrill Lynch represented Petronas in the deal.
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