Vedanta chairman: SEBI has approved open offer for Cairn India

Anil Agarwal says Vedanta plans to launch open offer very soon; is confident that government will approve acquisition before 15th April deadline

Mumbai: UK-based Vedanta Group today said it has received the nod from the market regulator to acquire a 51% stake in Cairn India at a cost of $9.6 billion and that it would launch an open offer soon.

"We have already received SEBI's approval for an open offer. The issue will open very soon. Within the next one to two days, we will send out the mails regarding this to all concerned," Vedanta Group chairman Anil Agarwal told journalists.

The Vedanta chief also appeared confident that the deal to acquire a majority stake in Cairn India, promoted by Edinburgh-based Cairn Energy Plc, would soon receive the approval of the government, PTI reports.

"We have a deadline of 15th April and I believe the government will give its approval before that... The royalty issue has to be sorted out with the government and the ONGC. We can... take up that issue later," Mr Agarwal said.

The deal, which has been hanging fire since November 2010, is likely to be considered for final approval by the Union Cabinet at its meeting in the national capital tomorrow.

As per the Takeover Code of the Securities and Exchange Board of India (SEBI), the acquirer is required to come out with an open offer to give an exit option to existing shareholders.

In August 2010, British energy giant Cairn Energy agreed to sell its majority stake in Cairn India to the Vedanta Group. But the deal has been hanging fire, with Cairn India-after some initial reluctance-making conditional applications for government approval on 23rd November, three months after the deal was announced.

The conditional approval it sought, came with a rider that government consent was not mandatory and that the corporate deal involving a share transfer does not trigger the pre-emption rights of the partner, state-owned ONGC.

The oil ministry has put a condition for granting approval for the deal, saying Cairn must get a no-objection from ONGC, which holds stakes in eight of the 10 properties of Cairn India.

The deal is awaiting the approval of the Cabinet Committee on Economic Affairs (CCEA) and according to the Petroleum Secretary S Sundareshan, Cairn Energy will have to take the consent of ONGC before selling its majority stake in its Indian unit.

"To my mind, they (Cairn) will require ONGC's consent," Mr Sundareshan said yesterday. He said that his ministry had received applications for approval only at November-end, and the government did not delay processing the application.

Once the government's nod is obtained, the two firms can approach their shareholders seeking an extension of the 15th April deadline, on the grounds that the conclusion remains a mere formality. However, due to the delay in getting regulatory clearances, the Vedanta Group would have to announce a fresh schedule for the open offer.

On 17 August 2010, two days after the announcement of the deal, the Vedanta group offered to acquire up to 20% stake from public shareholders for a price of Rs 355 a share. The Rs13,631 crore 'open' offer was scheduled to launch on 11th October and close on 30th October.

Any deal involving acquisition of 15% or more stake in a listed company requires the acquirer to make an open offer for 20% stake purchase from public shareholders and such an offer needs to be approved by SEBI.

Shares of Cairn India were in the red on the Bombay Stock Exchange Tuesday afternoon, at Rs365.20, or down 0.6% from its close on Monday, in a weak market.


L&T Metro Rail (Hyderabad) achieves financial closure for Hyderabad Metro Rail Project

L&T Metro Rail (Hyderabad) Ltd, the SPV incorporated to implement the Hyderabad Metro Project has achieved financial closure for the project

L&T Metro Rail (Hyderabad) Ltd, the SPV incorporated to implement the Hyderabad Metro Project, has achieved financial closure for the project. L&T Metro Rail is the subsidiary of Larsen & Toubro. The financial closure has been achieved in six months and is the largest fund tie up in India for a PPP (public private partnership) project till date.

A consortium of banks led by State Bank of India has sanctioned the entire debt requirement of Rs11,480 crore for the project. The equity component for the project, expected to be around Rs3,440 crore, would be infused primarily by L&T Group. The project will get a viability gap grant of Rs1,458 crore from the Central Government through Government of Andhra Pradesh.

Hyderabad Metro Project was announced by the Government of Andhra Pradesh (GoAP) on PPP mode under the Design, Built, Finance, Operate and
Transfer (DBFOT) basis. L&T emerged the lowest bidder and signed the Concession Agreement through its SPV, L&T Metro Rail (Hyderabad) Ltd, with the Government of Andhra Pradesh (GoAP) on 4 September 2010.

Shares of L&T were being quoted at Rs1,666 in late afternoon trade on the Bombay Stock Exchange today, down 1.42% from their previous close.


Ashok Leyland March sales up 21%

Ashok Leyland reported its highest-ever monthly sales in March at 12,168 units, registering a 21% jump over the same month previous year

Hinduja Group flagship firm Ashok Leyland reported its highest-ever monthly sales in March at 12,168 units, registering a 21% jump over the same month previous year.

In the 2010-11 financial year, the company registered an all-time high growth sales at 94,105 vehicles, registering a 47% growth against 63,926 units in the previous fiscal, Ashok Leyland said in a statement.

In March, the company's domestic sales jumped 22% to 11,312 units, while exports surged 12% to 856 units, over the corresponding month previous fiscal, it added.

For 2010-11, the company reported sales of 83,799 vehicles in the domestic market compared to 57,947 units in the previous fiscal, up 45%.

For the fiscal ended 31 March 2011, the company's exports touched 10,306 vehicles, a 72% jump as compared to 5,979 units in the previous fiscal.
Shares of Ashok Leyland were being quoted at Rs57.80 in late afternoon trade on BSE today, down 1.03% from their previous close.


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