August 22, 2008

Cairn India to sell 5.37% stake to fund expansion plan

BS reported that Cairn India has decided to sell 5.37% stake to Malaysian state oil & gas firm Petroliam Nasional and Singapore based Orient Global Tamarind Fund for INR 2,534 crore to fund expansion plans.

Cairn India will sell a total 113 million shares, 63.3 million shares to Petronas and 49.7 million shares to Tamarind at INR 224.30 each. The share sale price is 1.8% lower than Cairn India’s closing price on March 14th 2008 and a 40% premium to its listing price of INR 160.

Cairn India plans to utilize the sale proceeds to fund its expansion plans and ongoing projects, which includes production of oil at Mangala in Rajasthan by 2009. ONGC is Cairn’s partner in the project.

Mr Rahul Dhir CEO of Cairn India said that “It is confident of producing commercial oil from Rajasthan in 2009. The private placement will help the company to meet its investment plans and provide greater financial and operational flexibility."