British shareholders to gain by $8.48 billion

British shareholders of Cairn Energy will once again become more richer as most of the $8.48-billion that Edinburgh-based firm will get from selling majority stake in Cairn India will go to them.

It is almost the repeat of 2006 when money raised from India listing was paid to them. Cairn Energy Chief Executive Bill Gammell said: “A substantial amount of the $8.48-billion proceeds from sale of up to 51 per cent stake in the India unit to mining group Vedanta Resources would be returned to Cairn Energy Plc shareholders.''

Cairn Energy holds 62.37 per cent stake in Cairn India, its mainstay subsidiary that has three producing assets in India including the giant Mangala oilfield in Rajasthan block.

In fact, in 2005, Cairn Energy had offered its interest in Rajasthan and other fields in India to Oil and Natural Gas Corporation (ONGC) for close to $5 billion, but when the PSU did not agree with the valuation, it floated a unit and listed the firm on the stock market.

The Initial Public Offer (IPO) of Cairn India raised about $2 billion, the biggest beneficiary of which again was the overseas shareholders of Cairn Energy.

About $1.3-1.4 billion out of the IPO proceeds were paid to U.K.-listed firm's shareholders. Incidentally, Cairn India was the only cash profit generating subsidiary in the portfolio of Cairn Energy.

U.S.-based BlackRock Investment Management holds 11.22 per cent in Cairn Energy while HSBC Global Asset Management has 8 per cent interest.

Scotland's leading independent investment manager Baillie Gifford holds 6.22 per cent, U.K.'s Legal & General Investment Management 5.41 per cent, F&C Asset Management 3.70 per cent, Walter Scott & Partners 3.54 per cent, Schroder Investment Management 3.36 per cent and Fidelity Investments 3.97 per cent.