India Official: Cabinet Panel To Discuss Cairn-Vedanta Deal

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India Official: Cabinet Panel To Discuss Cairn-Vedanta Deal Thursday

By Rakesh Sharma

Published June 30, 2011

| Dow Jones Newswires


NEW DELHI -(Dow Jones)- A panel of cabinet ministers in India will meet later Thursday to discuss Vedanta Resources PLC's (VED.LN) proposal to buy a majority stake in Cairn Energy PLC's (CNE.LN) Indian unit, a senior government official said.

"Yes, it is coming up [in the cabinet meeting]," the official, who declined to be named, told reporters.

He said the meeting, which was earlier scheduled to start at 1115 GMT, will now commence at 1315 GMT.

India-focused, London-listed miner Vedanta had in August proposed to acquire a stake of up to 60% in Cairn India Ltd. (532792.BY), mainly from parent Cairn Energy and partly through an open offer to shareholders of the Indian unit.

The government has refrained from approving the deal due to tax and royalty-payment issues related to Cairn India's main oil producing block in the northwestern state of Rajasthan.

A ministerial panel in end-May recommended that the Cabinet Committee on Economic Affairs approve the proposed deal, provided Cairn agrees to evenly share the royalty on production from the Rajasthan block and withdraw arbitration proceedings on tax payments.

State-run Oil & Natural Gas Corp. (500312.BY), Cairn India's partner in the block, currently pays the entire royalty.

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