Another extension looms for Cairn-Vedanta deal
Thursday 19 May 2011
Cairn Energy is expected to yet again extend the deadline for its long-delayed $9.6bn (£5.9bn) deal to sell its Indian assets to the mining giant Vedanta. The oil explorer, which is looking to focus on drilling off Greenland, is expected to confirm the news today as it faces questions over the delays at its annual meeting.
The two FTSE 100 companies had hoped to seal the deal by last month, but without clearance from the Indian Government they were forced to move the deadline forward to this Friday.
But reports in the Indian press suggest that the ministerial panel charged with studying the proposal will not meet until next week, and Cairn is likely to confirm yet another postponement today.
Phil Corbett, an RBS analyst, said: "Given news flow in recent days that the group of ministers which is being convened to vet the deal will meet on 27 May, it is highly likely in our view that having come this far, both Cairn and Vedanta will agree to extend the long stop date further."
The transaction, which would see Vedanta take control of Cairn India, has been caught up in a dispute over royalty payments from the state-run Oil and Natural Gas Corporation (ONGC), which owns a minority interest in Cairn India's oilfields in the northern state of Rajasthan, but which pays 100 per cent of the output royalties due to the Government.
ONGC is said to be seeking a reviewed of the royalty arrangement in the wake of the Cairn-Vedanta pact. But Cairn and Vedanta have opposed moves to link their deal, which was announced last summer, with the royalty issue.
The two have repeatedly signalled their intent to proceed with the transaction. Last month, for instance, Vedanta bought 10.4 per cent of Cairn India in a £920m deal with the Malaysian company Petronas, which is scaling back its overseas portfolio.
- 1 Isis burns thousands of books and rare manuscripts from Mosul's libraries
- 2 Scarlett Johansson new band 'already hit with legal complaint' from another The Singles
- 3 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 5 'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Isis burns thousands of books and rare manuscripts from Mosul's libraries
Husband and wife die holding hands within hours of each other after 67 years of marriage
Mohammed Emwazi: Nine things we know about Isis militant 'Jihadi John'
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
'Jihadi John': Mohammed Emwazi – from British computer programmer to Isis executioner
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
This is what it's like to be dead, according to a guy who died for a bit
iJobs Money & Business
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...
£22,000 - £23,000: Beverley James: Are you looking for the opportunity to work...
£30,000: Beverley James: A fantastic opportunity has arisen for a person looki...