Cairn Energy has sold a 10 per cent stake in Cairn India to Vedanta Resources for $1.3 billion.
The sale of 191.9 million shares of the India assets took place on Monday, leaving Edinburgh-based Cairn Energy with a 52.2 per cent stake, and giving London-listed Vedanta Resources an aggregate 28.5 per cent stake.
The sale and purchase of a further 30 per cent of the share capital remained subject to approval by the Indian government, said Cairn.
Cairn Energy has remained circumspect about the conditional approval accorded to the deal by New Delhi, after the two firms re-jigged the terms and conditions. Cairn has maintained that it is yet to receive formal confirmation of any conditions, and is continuing to work on the transaction, alongside Vedanta Resources.
In August last year, Vedanta Resources and Cairn Energy had announced that they had struck a deal for the former to acquire a majority stake in Cairn India for up to $9.6 billion. It was part of Cairn Energy’s plans to refocus its efforts on exploration in Greenland, and the Vedanta Group’s to become only the second diversified miner to move into the oil and gas space after BHP Billiton.
However, the deal has hit a roadblock, with the lengthy government approval process raising fears among foreign investors. In June, the two companies announced revised terms for the deal, including splitting the sale into two tranches, and the loss of a non-compete fee, which would bring down the price of Cairn India shares to $7.85 from $8.66.