New Delhi – Britain’s Cairn Energy announced on Tuesday it had struck a deal to sell nearly half of its residual stake in Cairn India and raise $910 million to fund its oil and gas exploration operations.
Cairn has reached agreement with financial services giant Citigroup to sell 153 million shares of Cairn India in a move expected to raise $910 million after transaction costs, the company said in a statement.
“These proceeds will be used to deliver exploration led-growth and fund the development of discovered resources in the UK and Norwegian North Sea, Cairn Energy chief executive Simon Thomson said.
The share sale accounts for eight percent of the capital of Cairn India’s former Indian business.
The Edinburgh-based oil and gas explorer sold its 40-percent stake in Cairn India last December to Britain’s Vedanta Resources for $6.5 billion after a long battle to win Indian government approval.
Cairn was lifted from relative obscurity when it struck oil under India’s Rajasthan desert in 2004 and became a leading explorer. After selling its controlling stake in Cairn India, it turned its focus to the North Sea and elsewhere but so far major commercial success has eluded the company.
After the sale to Vedanta, Cairn Energy retained a 22-percent holding in Cairn India, which has been performing well for its new controlling owner, billionaire tycoon Anil Agarwal of Vedanta Resources.
The latest sale plans come after Cairn Energy in June sold a 3.5 percent stake in Cairn India for around $360 million.
“We are now extremely well positioned both financially and operationally to deliver on our existing high quality portfolio of development and exploration projects,” Thomson said.
The Scottish company has said it is “actively re-balancing its portfolio to deliver exploration-led growth” and now is looking at developing more immediately promising assets to fund its higher-risk exploration.
After the latest sale, Cairn Energy will retain around a 10 percent stake in Cairn India.
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