Cairn-Vedanta deal to miss yet another deadline
12 May 2011
The 20 May deadline for the finalisation of the Cairn-Vedanta deal is likely to be extended again, as government approval for the deal is unlikely by this date.
Scotland-based Cairn Energy is seeking to sell up to a 51-per cent stake in Cairn India, including its valuable Rajasthan assets, to Vedanta Resources. However, the deal has been bogged down due to objections from Cairn's partner Oil & Natural Gas Commission.
The fate of the deal is dependent on an empowered group of ministers, which is unlikely to meet before the companies' deadline, as ministers are busy with the post-election scenario in various states.
Cairn Energy chief executive officer Sir Bill Gammell and Cairn India CEO Rahul Dhir on Wednesday met petroleum minister S Jaipal Reddy and expressed their concern at the delay. Cairn Energy was hoping to get mandatory approvals for its stake sale in Cairn India Ltd to Vedanta by 20 May.
Reddy reportedly expressed helplessness, saying finance minister Pranab Mukherjee is the one who has to convene the meeting of the group of ministers. Moreover, the deadline is internal to Cairn and Vedanta and had nothing to do with government, he apparently said.
This would be the second time Cairn will extend the deadline. Earlier, it had to extend the deadline for the stake sale from April 15 to May 20.
