Cairn Energy sells 8% stake in Cairn India for USD 910 million

Cairn Energy Plc today sold 8 per cent stake in Cairn India for USD 910 million as the UK-based firm winds down its interest in the firm that operates that nation's biggest oil field on land.

The Edinburgh-based firm, which last year sold 40 per cent of its stake in Cairn India to Vedanta Resources for USD 5.5 billion, has in two tranches since June sold 11.5 per cent stake at rate which is much less than Rs 355 per share that it got from billionaire Anil Agarwal-led mining group.

After today's sale of more than 15.26 crore shares, Cairn Energy is still left with 10.28 per cent stake in Cairn India.

The average sale price was Rs 325.05 per share, which is less than the closing price of Rs 333.60 on the Bombay Stock Exchange (BSE).

In June, it had sold 6.67 crore shares or 3.5 per cent stake in Cairn India for about USD 360 million at Rs 308.73 a share.

The proceeds of today's sale will be used to help fund the development of Cairn Energy's recently acquired positions in the North Sea, where it has spent over USD 1 billion buying two companies, it said in a statement here.

Simon Thomson, Chief Executive, Cairn Energy Plc said, "Cairn is delighted to have realised further value from its Rajasthan discoveries in India.

"In line with our stated strategy these proceeds will be used to deliver exploration led growth and fund the development of discovered resources in the UK and Norwegian North Sea. We are now extremely well positioned both financially and operationally to deliver on our existing high quality portfolio of development and exploration projects."

Over the past two years, Cairn Energy has shifted its focus towards the North Sea and the Mediterranean, adding those regions to its core exploration assets in Greenland, as it moved away from India.

The company had yesterday launched the stock offering for between Rs 317.90 and Rs 328.30 per share, a discount of between 5 and 8.7 per cent to Cairn India's closing price on Monday.

It had in the run up to seeking government approvals for selling 40 per cent of its stake in Cairn India to Vedanta claimed that it will retain about 22 per cent interest in the company to give it "the strength and flexibility to explore new opportunities for delivering transformational growth".

But in less than a year from receiving all approvals, the company has decided to sell off all its shareholding in Cairn India and exit the country.

Following the sale, Cairn Energy would retain about 10.3 per cent shareholding in Cairn India.

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