By OGJ editors
HOUSTON, Apr. 7 -- Vedanta Resources PLC, London, has received approval by India’s securities regulator to start an open offer for up to 20% of Cairn India, for which it has a conditional agreement to buy a majority stake for up to $9.6 billion (OGJ, Aug. 23, 2010, p. 26).
The Securities and Exchange Bureau of India approved an open offer to Cairn India’s minority shareholders, which must be completed before the takeover can progress.
A Vedanta Indian subsidiary, Sesa Goa Ltd., will make the open offer.
The agreed acquisition of as much as 51% of Cairn India shares by Vedanta, a mining conglomerate, from Cairn Energy, Edinburgh, awaits approval by the Indian government.
Approval has been complicated by a dispute over royalties paid by state-owned Oil & Natural Gas Corp. on production in a project in Rajasthan operated by Cairn India. ONGC owns a 30% interest in the project.
Cairn Energy and Vedanta have extended a deadline for completion of all conditions in the transaction to May 20.
At completion of the sale to Vedanta, Cairn Energy will hold an interest in the fully diluted share capital of Cairn India of 10.6-21.6%.