Receipt of formal conditional approval from the Government o

Monday 01 August, 2011
Vedanta Resources
Receipt of formal conditional approval
RNS Number : 4782L
Vedanta Resources PLC
01 August 2011



1 August 2011



Receipt of formal conditional approval from the Government of India



Vedanta Resources plc ("Vedanta") has now received a formal notification from the Government of India ("GoI") providing conditional approval for the proposed part sale of Cairn Energy plc ("Cairn Energy") shareholding in Cairn India Limited ("Cairn India") to Vedanta. These conditions are:



1. Parent financial and performance guarantee furnished by Cairn Energy plc in pursuance of relevant applicable Article(s) of 7 NELP Production Sharing Contracts ('PSC") and 3 pre-NELP PSCs, shall be substituted by Parent financial and performance guarantee to be furnished by Vedanta, which needs to be acceptable to the Government and should be in a form and substance set out in the PSC.

2. Vedanta to Guarantee that the technical capability of Cairn India is and shall be kept undisturbed and ensure continued production of oil and gas as per approved Field Development Plan (FDP) from time to time. In case Vedanta fails to perform as guaranteed the GoI shall be entitled to stipulate additional conditions, as deemed fit, including change in operatorship of blocks.

3. Vedanta shall also give an undertaking that they shall ensure adherence of the approved field development plans and work programme.

4. Cairn India and its affiliate shall provide the No objection certificate (NOC) obtained from their consortium partner(s) for each of the Block (except Ravva (PKMG-1) and CB-OS/2 blocks) for the proposed transaction under the respective PSCs.

5. Necessary approval from other regulatory bodies such as SEBI, on the proposed transaction to be obtained and submitted by Vedanta.

6. Necessary Security Clearance from Ministry of Home Affairs in favour of the assignee i.e. Vedanta to acquire the shareholding shall be obtained and submitted by the said assignee.

7. In respect to RJ-ON-90/1 block, the parties, Cairn India, Cairn Energy Pty Limited, Cairn Energy Hydrocarbon Limited and any other affiliate company of Cairn India; and Vedanta and any other affiliate of Vedanta; shall agree and give an undertaking that Royalty paid by ONGC is cost recoverable by ONGC as contract costs, as per the provisions of PSC.

8. In respect to RJ-ON-90/1 block, Cairn Energy Pty Limited and Cairn Energy Hydrocarbon Limited shall withdraw the arbitration case relating to dispute raised by them on payment of Cess under the PSC.


Vedanta is working with Cairn Energy to satisfy these conditions and complete this transaction.

Vedanta notes that Cairn India plans to seek a shareholder approval for the conditions imposed by the GoI.


A further announcement will be made in due course.

[cphil31]

Bien ! Maintenant, la balle est dans le camp privé, ça devrait accélérer.

[bingogo]

(AFP) – 7 hours ago

NEW DELHI — London-listed mining group Vedanta Resources on Monday said it has received formal conditional approval from the Indian government for its takeover of Cairn Energy's India unit.

The group, led by Indian-born billionaire Anil Agarwal, said in a statement it was now working to meet the conditions that the Indian government has set for its takeover of Cairn India.

"Vedanta is working with (British oil explorer) Cairn Energy to satisfy these conditions and complete this transaction," a statement said.

The approval came with a key rider that Cairn India and India's state-owned Oil and Natural Gas Corp (ONGC) share the burden of royalty payments on crude production from their Rajasthan fields.

ONGC owns a 30 percent stake in the block but pays royalties on 100 percent of the output under a "royalty holiday" scheme dating from the 1990s aimed at promoting private oil exploration in energy-hungry India.

"Vedanta notes that Cairn India plans to seek a shareholder approval for the conditions imposed by the government of India," the miner said.

Cairn India has strenuously objected to the royalty payment sharing, saying such a step will sharply cut its profits.

But analysts expect Cairn shareholders to give their nod to the deal which Vedanta first proposed last August to add to its numerous India-focused mining assets.

The sale has been beset by difficulties caused by deep differences between Cairn and ONGC over the royalties issue.
The formal transaction process is expected to be completed within the next couple of months, according to Vedanta.

Vedanta has so far built up a 28.5 percent stake in Cairn India. It wants government approval to buy another 30 percent stake in Cairn India from Cairn Energy. Cairn Energy currently owns a 52 percent stake in Cairn India.