UK-based Cairn Energy Plc on Tuesday said it will seek its shareholder nod on October 7 for the sale of majority stake in its Indian arm, Cairn India, to London-listed Vedanta Resources Plc for up to $8.48 billion.
"The general meeting (of the shareholders) will be held at Edinburgh on October 7, at 1400 hours (local time)," the company said in a notice.
Cairn Energy is selling up to 51 per cent of its 62.38 per cent stake in Cairn India to billionaire Anil Agarwal-run Vedanta Resources.
Mimicking Australian mining firm BHP Billiton's strategy of diversifying into oil, Cairn India will give Vedanta access to the nation's biggest onshore oilfield.
Cairn India currently produces 125,000 barrels of crude oil per day (6.25 million tonnes a year) from Mangala oilfield in Rajasthan. It has said the output can be raised to 150,000 bpd (7.5 million tonnes).
The entire Rajasthan block, estimated to hold 6.5 billion barrels of oil reserves, can produce up to 240,000 bpd, equivalent to 12 million tonnes a year of peak output from state-owned Oil and Natural Gas Corp's (ONGC) prime Mumbai High fields in the western offshore.
Cairn Energy Plc chief executive Bill Gammell had last week said the deal hinges upon completion of an open offer by the Vedanta Group to minority shareholders of Cairn India.
Vedanta Resources is yet to get market regulator Securities and Exchange Board of India's approval for an open offer to acquire an up to 20 per cent stake from minority shareholders at a price of Rs 355 a share, Rs 50 less than what it is paying Cairn Energy for a majority stake.
The open offer, based on the schedule announced by Vedanta last month, is to open on October 11.
The nod by Cairn Energy shareholders would mean nothing unless Vedanta is able to complete the open offer in India, he had said on September 16 in the national capital.
Vedanta is paying Cairn Energy Rs 405 per share for an up to 51 per cent stake in Cairn India. This includes a Rs 50 non-compete fee to keep the Edinburgh-based firm out of India, Pakistan, Bangladesh and Sri Lanka for three years.
The minority shareholders have been offered a price sans the non-compete fee.