The transaction was originally announced in August last year, but its completion was delayed as state-owned ONGC, which partners Cairn India in its crown jewel Rajasthan oilfields as well as seven other properties, demanded sharing of royalty it pays before the deal was cleared
New Delhi: British oil firm Cairn Energy Plc today said it has completed the sale of a controlling stake in its Indian unit to mining giant Vedanta after protracted wrangling over royalty payments, reports PTI.
Cairn Energy, which had in July sold a 10% stake in Cairn India to Vedanta for about $1.4 billion, got another $4.1 billion from the sale of the remaining 30%, the company said in a press statement.
“Cairn is pleased to announce that the transaction has now completed,” it said.
Sesa Goa, a unit of London-listed Vedanta Resources, had yesterday stated that it has raised its stake in Cairn India to 20% following the acquisition of 28.8 million additional shares, amounting to a 1.5% stake.
The Vedanta Group now holds 60% in Cairn India, while Cairn Energy retains about 22%.
The transaction was originally announced in August last year, but its completion was delayed as state-owned Oil and Natural Gas Corporation (ONGC), which partners Cairn India in its crown jewel Rajasthan oilfields as well as seven other properties, demanded sharing of royalty it pays before the deal was cleared.
ONGC, being the licensee of the Rajasthan block, pays 20% royalty on not just its 30% share of production, but also on the 70% share of Cairn India.
It wanted this payment to be treated like other project costs and taxes and recouped from revenues earned from oil sales, a demand opposed by Cairn India.
Cairn India also felt the Rs2,500 per tonne oil cess was a liability of the licensee and was opposed to deviating from the signed contract to share any of this burden.
The government, however, supported ONGC’s stand and made sharing of royalty and acceptance of cess liability by Cairn India preconditions for giving its nod to the transaction.
Despite Cairn India’s reservations, its current and future promoters—Cairn Energy and Vedanta, respectively—accepted the government conditions, following which ONGC waived its pre-emption rights over the deal.
The home ministry also late last month gave security clearance to a Vedanta takeover of the operations of India’s biggest onland oil discovery in more than two decades, besides other properties of Cairn India.
Vedanta acquired 40% of Cairn Energy’s stake at Rs355 per share.
Cairn Energy said it would return $3.5 billion to shareholders from the net proceeds of $5.5 billion from the stake sale in Cairn India.
Shareholders would have “an element of choice as to when and in what form they receive cash,” it said.
Cairn discovered significant quantities of oil in Rajasthan in 2004 and full production began in August 2009.
The block is estimated to have the potential to produce 300,000 barrels of oil per day at its peak.
Cairn Energy Plc chief executive Simon Thomson said: “I am delighted to announce completion of this transaction, which represents a major milestone in Cairn’s history. It crystallises the very significant value creation that we have delivered from our Indian business and allows us to return around three and a half billion dollars to shareholders.”
“Our remaining 22% shareholding in Cairn India, retained cash and balance sheet strength provides financial flexibility and an excellent platform for future growth opportunities,” he added.
Britannia Industries, however, did not give the exact number of employees it has sacked
Confectionery major Britannia Industries has sacked some employees across levels in India on the basis of non-performance.
The company, however, did not give the exact number of employees it has sacked.
When contacted, Britannia spokesperson said, "This is part of the ongoing performance management process, which differentiates the great, good and under-performers and has nothing to do with any other factor."
"Each year, under-performers [usually 20 to 30] are put on a performance improvement plan and progress is consistently and carefully monitored," the spokesperson said.
"In those cases, where the level of performance continues to be below the acceptable benchmark and there is no noticeable improvement, employees are transitioned," the company added.
To a particular query on whether the employees were given prior notice, the spokesperson said, "There is no surprise for the employee as it is discussed in advance as part of the performance review and happens every year."
On Thursday, Britannia Industries closed at Rs460.80 per share on the Bombay Stock Exchange, 1.42% down from the previous close.
Fortis launched its first standalone dialysis centre in Delhi
Fortis Healthcare (India) said it plans to invest up to Rs30 crore to set up 50 standalone dialysis centres across the country in the next two years for treatment of patients suffering from kidney failure.
In the first phase, the company plans to set up six centres across Delhi and the National Capital Region (NCR), while the remainder would come up in other metros and Tier-II and III cities.
Our target is 50 centres in the next two years. Depending upon the varied locations across the country, the investment per centre would be in the range of Rs50-Rs60 lakh," Fortis Healthcare (India) CEO Aditya Vij told reporters. The company launched its first standalone dialysis centre in Delhi. The centres would be set up under the brand name, 'Renkare'.
"With Renkare, we will establish a pan-India network of standalone centres that will offer a high quality, convenient and relaxed experience to dialysis patients," Vij added.
According to industry estimates, 8 lakh people suffer from end stage renal disease (ESRD) in India currently, a number which is expected to increase to nearly 9.5 lakh by 2015. "Our mission is to provide a network of quality dialysis centres to the growing populace with kidney failure. We will start with major metros and expand the network to Tier-II and III cities, where access to care is most needed, but often unavailable," Renkare CEO Varun Sethi said.
Fortis Healthcare (India) commissioned its first hospital in 2011 and now has a network of 68 hospitals, with an over 10,000-bed capacity, across the country.