Vedanta to seek shareholders' nod for Cairn deal on Dec 13

LONDON: India-focused mining group Vedanta Resources will on December 13 seek its shareholders' nod for buying a majority stake in Cairn India for up to USD 9.6 billion.

The London-listed group, which last week secured USD 6 billion worth of debt to finance the acquisition, today sent out a circular to its shareholders convening an extraordinary general meeting on December 13.

In the circular, Vedanta Resources Chairman Anil Agarwal stated, "The acquisition is also subject to any required government of India consents having been given."

The company was to seek its shareholders' nod by October 30 as per the schedule laid out by UK's Cairn Energy, which is selling a 40-51 per cent stake in its Indian subsidiary to Vedanta. However, the deadline was not kept.

Vedanta also hopes to get Indian market regulator SEBI's nod for acquiring an additional 20 per cent stake from minority shareholders of Cairn India by December-end and may launch an open offer in the early part of January, 2011.

Incidentally, Cairn today made a formal application to the government for approval of transfer control of its three properties, including the mainstay Barmer oilfields in Rajasthan, that were previously not included in the letters sent for the state's approval.

Oil Secretary S Sundareshan had on November 19 said that the government would consider the grant of approval for the Cairn--Vedanta deal only after UK-based Cairn Energy made a formal application for transfer of control of all 10 of its properties in the country.

The government decision would take 2-3 months from the day the applications are received, he had said.

Sources said that if the government's nod was to come by February-end or even in March, it would be well within the April 15, 2011, deadline set by Cairn and Vedanta for closure of the transaction.

In the circular, Agarwal said the acquisition would establish Vedanta as a leading player in the Indian oil and gas sector. "The acquisition will allow Vedanta to apply its core skills of project management and development of reserves and resources in conjunction with the technical knowledge and capabilities of Cairn India."

Cairn Energy had last month secured its shareholders' nod for selling most of its 62.38 per cent stake in the Indian unit, while Sesa Group, a Vedanta Group firm that will make an open offer for a 20 per cent stake in Cairn India, obtained approval from its shareholders on October 18.