Cairn Energy will announce the results of a shareholder vote on the acceptance of the conditional sale of its Indian arm Cairn India to Vedanta Resources, 14 September, the company said today.
According to Cairn India, shareholders of the parent company Cairn Energy has to vote for acceptance of conditions imposed by the government on the sale to Vedanta Resources.
Cairn Energy, has a 52.11 per cent stake in Cairn India. It has already informed the government and its partner ONGC that it, along with Vedanta (which has an 18.5 per cent stake), would vote for acceptance of conditions that would include Cairn India agreeing to payment of royalty and cess on the mainstay Rajasthan oil block.
"Cairn India has written to all of you to seek your views on accepting the conditions put in place by the government for them to finally clear this transaction," Cairn India non-executive director Jann Brown told shareholders in Mumbai today.
"The board views the ballot, which will be declared on September 14, 2011, as the most appropriate and democratic way to determine this decision," she said.
Cairn Energy plans to sell a 40 per cent stake in Cairn India at Rs355 a share to London-listed mining group Vedanta, which would fetch $6.02 billion for Cairn. Vedanta has already acquired an 18.5 per cent stake in Cairn India from minority shareholders and Malaysia's Petronas.
According to Brown, the government had approved the transaction and "has imposed certain conditions".
Brown said Cairn India believed the Rajasthan block could produce 240,000 barrels per day of oil, as against its current output of 125,000 bpd.
"Without the active support of the Government of India and (partner) ONGC, it will not be possible for Cairn India to exploit the full potential of the resource base in Rajasthan," Brown said.