Cairn shareholders approve purchase of Vedanta stake

City A.M. Reporter
Vedanta Resources cleared some hurdles to its $10bn (£6.3bn) plan to take a sizeable stake in Cairn India yesterday but concerns of potential delays to the deal weighed on Cairn Energy shares.

Cairn Energy agreed in August to sell London-listed miner Vedanta Resources a stake of between 40 and 51 per cent of Cairn India, the company it formed through spinning off its Rajasthan assets in 2007, for up to $8.5bn.

However, rumblings from government and Cairn India’s partner in its big Rajasthan fields, Indian state-run Oil and Natural Gas (ONGC), have prompted fears among Cairn Energy investors that the deal which has been welcomed by analysts, may not close.

Cairn said yesterday that over 99 per cent of shareholders had voted to support the planned sale – a result predicted by analysts.

Cairn plans to return some cash to investors and invest the rest in exploration.

India’s number two oil official, S Sundareshan, downplayed the chances of Indian rival ONGC seeking to pre-empt the sale, saying the high cost would be a problem. “I don’t think the ONGC board has seriously considered a counter offer,” he said.