UK-based Vedanta Group said on Tuesday it has received market regulator Securities and Exchange Board of India's nod for a $9.6 billion deal to acquire a 51 per cent stake in Cairn India and will 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 reporters in Mumbai.
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.
"We have a deadline of April 15 and I believe the government will give its approval before that. . . The royalty issue has to sorted out with the government and the ONGC. We can. . . take up that issue later," he 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 New Delhi on Wednesday.
As per the Takeover Code of the Sebi, the acquirer is required to come out with an open offer to give an exit option to existing shareholders.
The deal was announced in August, 2010, wherein British energy giant Cairn Energy agreed to sell its majority stake in Cairn India to Vedanta group.
However, the deal has been hanging in fire as Cairn India after initial reluctance, made conditional applications for government approval on November 23, more than three months after the announcement of the deal by its parent firm Cairn Energy Plc.
The conditional approval sought by it came with a rider that government consent was not mandatory and that the corporate deal involving a share transfer does not trigger partner state-owned
Oil and Natural Gas Coporation's preemption rights.
However, the oil ministry has conditioned the approval to the $9.6 billion deal on Cairn getting a no-objection from ONGC, which holds stake in eight out of the 10 properties of Cairn India.
The deal is currently awaiting an approval from the Cabinet Committee on Economic Affairs and according to the petroleum secretary S Sundareshan, Cairn Energy needs to take consent of partner ONGC before selling its majority stake in its Indian unit.
"To my mind, they (Cairn) will require ONGC's consent," he said on Monday. Sundareshan said his ministry had received applications for approval only in November-end, and the government did not delay in processing the application.
Once the government's nod is obtained, the two firms can approach their shareholders seeking extension of the April 15 deadline, saying the conclusion now remains a mere formality.
However, due to delay in getting regulatory clearances, the Vedanta Group will have to announce fresh schedule for the open offer.
On August 17, 2010, just two days after the announcement of the deal, the Vedanta group had offered to acquire up to 20 per cent stake from public shareholders for a price of Rs 355 per share.
The Rs 13,631-crore (Rs 136.31 billion) open offer was then scheduled to open on October 11 and close on October 30.
Any deal involving acquisition of 15 per cent or more stake in a listed company requires the acquirer to make an open offer for 20 per cent stake purchase from public shareholders and this offer needs to be approved by Sebi.
Shares of Cairn India were in red on the Bombay Stock Exchange at 1410 hours at Rs 365.20, down 0.6 per cent from its previous close.
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