Cairn Energy sells 8% stake in India venture for $910 mn

Offers 15.3 crore shares at Rs.317.90-328.30 apiece

Cairn India's Mangala Processing Terminal, Barmer. Photo: Rohit Jain Paras

UK’s Cairn Energy plc on Tuesday said it has sold 8 per cent stake in Cairn India for a net realisation of about USD 910 million.

Following the sale, Cairn Energy retains about 10 per cent shareholding in Cairn India, the company said in a press statement here.

“At the General Meeting of the company held on May 17, 2012, shareholders authorised the Board to dispose of all or part of Cairn Energy’s residual interest in Cairn India,” it said.

Subsequent to that, it has now sold a total of 152,629,500 shares in Cairn India.

“Cash proceeds from the sale are expected to be USD 910 million (after transaction costs),” the statement said.

“The proceeds will be used to fund Cairn’s ongoing capital requirements, which include the development of discovered resources in the North Sea as well as Cairn's wider exploration led growth strategy,” it added.

Cairn India shares, on Monday, closed at Rs.345.55 on the stock exchanges.

Edinburgh-based Cairn Energy had in June sold 6.67 crore or 3.5 per cent stake in Cairn India for about $360 million.

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 would 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.