The Hindu : Business : Cairn's private placement fetches $820 m

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Friday, Nov 24, 2006
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Cairn's private placement fetches $820 m

Special Correspondent

Petronas subsidiary subscribes for more than 176 million shares

CHENNAI: Cairn Energy plc announced that its pre-floatation private placing of the shares of Cairn India, its newly floated Indian subsidiary, had closed on Wednesday.

In all, 209.67 million Cairn India shares had been placed at a price of Rs. 176.48 per share, raising a total of Rs. 3,700 crore ($ 822.47 million).

If the flotation price per share is lower than Rs. 176.48, the placing price would also be reduced accordingly, a company release said.

The private placing was equivalent to 11.88 per cent of the issued share capital of Cairn India and, at the placing price, implied a Cairn India market capitalisation of Rs. 31,154 crore (or approximately $ 6.92 billion) following successful completion of the flotation and excluding any exercise of the over-allotment option, said the release. The consequent implied valuation for the company's current interest in Cairn India was $ 6.32 billion, after taking into account the proportion of the gross proceeds to be retained by Cairn India (expected to be $ 600 million).

The placing was conditional upon the allotment of shares in the flotation occurring prior to February 10, 2007.

Preparations remained on track to complete the flotation in December 2006, the release added.

The largest investor in the placing was a wholly owned subsidiary of Petroliam Nasional Berhad (Petronas), which had subscribed for 176.53 million shares (representing 10 per of the post-flotation share capital).

The balance of 33.14 million shares were being subscribed for by a combination of Indian and international institutional investors, the release added.

As a result of the placing, the net offer to the public of shares in Cairn India would be reduced from 538.47 million shares to 328.80 million shares.

Merrill Lynch and ABN AMRO Rothschild have acted as joint co-ordinators in relation to the placing.

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