In an interesting development, Anil Aggarwal-owned Vedanta Resources, which is struggling to get the approval of the Union Petroleum and Natural Gas Ministry for the $9.6-billion Cairn-Vedanta deal, on Tuesday bought 10.5 per cent stake of Malaysian state-owned firm Petronas in Cairn India.
According to a statement issued by Petroliam Nasional Bhd (Petronas), the company said it had sold its 14.94 per cent holding (283.4 million shares) in Cairn India for a total consideration of about $2.1 billion. About 200 million shares (or 10.5 per cent) of these were bought by Sesa Goa, a unit of Vedanta, at Rs.331 apiece, official sources said. Petronas' remaining stake of up to 4.4 per cent was picked up by Indian and foreign institutions in a sale arranged by Bank of America Corp.
Vedanta had in August last announced buying of 40 to 51 per cent stake in Cairn India from Britain-based Cairn Energy but the deal is yet to get the approval of the Union Government. As part of the transaction, Sesa Goa made an open offer to buy an additional 20 per cent stake in Cairn India at Rs.355 a share.
Sources said by buying Petronas shares, Vedanta had ensured it would have majority stake in Cairn India irrespective of the outcome of the open offer that closes at month end. For Petronas, one of the firsts to invest in Cairn India, it was a desperate sale. It had been unhappy the way the company's growth was being hampered by the haphazard decision making in the Petroleum Ministry.
Cairn India is producing 1.25 lakh barrels of oil a day from the Mangala oilfield, the largest in Rajasthan block. The output can be raised to 1.50 lakh bpd without any investment but the Ministry has been sitting on approval for months now. Also, it has thrown new challenges in the form of seeking to change contract for the Rajasthan fields to make Cairn India pay a part of royalty on crude oil produced which otherwise is purely a liability of ONGC.
