Cairn Energy has no immediate plans to shed its 10.27 per cent stake in Cairn India.
The last sale of its holding was done at Rs 337 and it is unlikely that they will sell below that figure, say sources. On Monday, the Cairn India stock closed at Rs 290 at the BSE.
Cairn Energy, the former promoter of Cairn India, has been in the news since it sold its majority stake in the Indian arm to Anil Agarwal’s Vedanta Group. A Cairn Energy spokesperson told
Jann Brown, Managing Director and CFO, Cairn Energy, had said: “The cash at the year-end, $1.6 billion, was significantly ahead of the August estimate and that's primarily because we made a second sale of our Cairn India stock, in September last year, taking advantage of market conditions at the time. There were two sales of Cairn India stock, the net back to us in cash terms was $1.3 billion and the residual 10 per cent holding is still worth over a billion and we’re satisfied that there's growth potential in that holding.”
Cairn India, on April 10, had informed the BSE that in the fourth quarter of fiscal 2012-13, the average daily gross operated output from its producing assets – Rajasthan (Barmer oil fields), Ravva (East Coast, both oil and gas), and Cambay (West Coast, primarily gas) – was 202,014 barrels of oil equivalent (both oil and gas). This was 12 per cent higher than the corresponding prior period.
Cairn India has a portfolio of 10 blocks, including one in Sri Lanka and one in South Africa.
Speculation
Meanwhile, there was buzz recently that Vedanta may look at acquiring Cairn Energy. This was based on a CLSA report that recommended Cairn India’s management to consider acquisition of Cairn Energy.
However, those closely associated with Vedanta said there was no such thought or discussion within the group as yet and dismissed it as speculation. Cairn Energy, on its part, has always maintained that it prefers being focused on its core competency of exploration and development of oil and gas fields.
What further fuelled the buzz were international reports indicating that David Einhorn, an American hedge fund manager who is called a top corporate raider had picked up over three per cent in Cairn Energy. Einhorn’s $8-billion hedge fund Greenlight Capital has been a shareholder in Cairn Energy for over a year.
Einhorn was recently in the news for dragging Apple Inc to court in an attempt to force it to distribute some of its cash pile to investors.