Petronas sells Cairn stake for $2.1 billion

19th April 2011, Comments 0 comments

Malaysia's state energy firm Petronas said Tuesday it had sold its near 15-percent stake in Cairn India for $2.1 billion, with a media report saying British company Vedanta was the buyer.

"The transaction brings to a close a successful association as a shareholder with Cairn India since 2006," oil and gas explorer Petronas said in a statement, without specifying the purchaser.

India's CNBC-TV 18 channel had earlier reported that most of the stake was sold to resources giant Vedanta, which aims to take control of the Indian energy explorer.

The channel reported the purchase came as a sign that the London-listed company is keen to pursue its planned $9.6-billion takeover of Cairn India, a unit of Scotland's Cairn Energy, despite numerous delays.

CNBC-TV 18, which did not cite sources, said London-listed Vedanta bought an 11 percent stake in Cairn India from Petronas, while the remaining 3.9 percent went to financial institutions.

CNBC said the share sale would have raised around $2 billion for Petronas.

Vedanta, controlled by Indian-born billionaire Anil Agarwal, last August said it wanted to buy up to 60 percent of Cairn India to add to its numerous India-focused assets.

But the sale has been beset by difficulties caused by differences between Cairn and its Indian state-owned partner Oil and Natural Gas Corp (ONGC) over the payment of royalties involving India's biggest onshore oilfields.

The Indian cabinet has been split over whether the royalty row should be settled before or after the sale goes through, and the matter was referred earlier this month to a panel of ministers for review.

The impasse comes at a bad time for India as foreign investment has slumped, with investors worrying about a slew of corruption scandals that have shaken the government, including a huge suspected telecoms licensing fraud.

About 283.43 million shares of Cairn India were traded for about 331 apiece on the Bombay Stock Exchange early Tuesday, Dow Jones Newswires reported.

© 2011 AFP

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