Cairn Energy sells 3.5% of Cairn India for $360 million
BY RAGHAVENDRA UPADHYAYA AND ASHUTOSH JOSHI
MUMBAI--Cairn Energy said it has sold a 3.5% stake in Cairn India Ltd. for $360 million, in a deal which may help the London-listed company to finance its expansion plans.
In a filing with the London Stock Exchange, Cairn Energy said the stake sale in Cairn India would "fund its strategy and provide greater operational flexibility." It didn't elaborate.
Cairn Energy needs funds to acquire assets to expand its portfolio with lower-risk, near-term exploration and development assets in the Norwegian and U.K. sector of the North Sea, complementing the company's riskier frontier exploration in Greenland, a move which will balance its overall business.
The stake sale comes after Cairn Energy said earlier in the month it will bid for London-based Nautical Petroleum PLC, an acquisition that would diversify Cairn's exploration program in the North Sea. In April, it acquired privately held Norwegian Agora Oil & Gas in a deal worth $450 million.
Cairn UK Holdings Ltd. sold about 66.8 million Cairn India shares in a price band of 305 rupees to 314 rupees apiece via block deals on the stock exchanges, two people aware of the matter told Dow Jones Newswires, asking not to be named.
A Cairn India spokeswoman declined to comment on the share sale, while Cairn Energy didn't immediately respond to an email seeking comments.
Cairn India shares fell as much as 7.8% Friday to INR302.10, as the stake sale was priced at a discount to the stock's Thursday close. At 0722 GMT, Cairn India was down 5.7% at INR308.80.
The transaction brings down Cairn Energy's stake in the Indian explorer to 18.3% from 21.8%.
In December 2011, Cairn Energy completed the sale of a 58.5% stake in Cairn India to Vedanta Resources PLC and its units.
Vedanta paid gross proceeds of $8.67 billion for the stake, which gave it a foothold in India's expanding oil and gas sector, while it helped Cairn Energy to focus on drilling in Greenland for commercial quantities of petroleum.
In its latest annual report, Cairn Energy Chief Executive Simon Thomson said that the company views its holding in Cairn India as an important investment asset from which further value can be realized at an appropriate time.
Citigroup was the sole book runner for Friday's deal.
Dow Jones Newswires