The Hindu Business Line : Cairn India raises Rs 2,500 cr thru pref issue

Mumbai, March 17 Cairn India Ltd has raised Rs 2,534.6 crore ($625 million) through private placements of shares with Petronas and Orient Global Tamarind Fund Pte Ltd.

Both investors have agreed to purchase a total of 113 million shares of Cairn India at Rs 224.30 per share, which represents a 0.46 per cent premium to the average closing price of the share on NSE in the last two trading days.

The script was closed traded on Monday at Rs 214.65 on the NSE, from the previous close of Rs 228.40.

The board of directors of Cairn India at its meeting held on Monday, approved the placements through a preferential issue of 63.3 million equity shares to Petronas and 49.7 million equity shares to Orient Global Tamarind Fund Pte Limited, Singapore.

With this private placement, Petronas, has increased its stake in the company from 9.93 per cent to 12.7 per cent.

The Malaysian company had originally picked up the stake in the Indian company just before its IPO in November 2006.

Cairn Energy PLC, UK holds 69 per cent stake in Cairn India.

Cairn India said the net proceeds of the private placement will be used to fund capital expenditure and for general corporate purposes.

These shares will be locked in for a period of one year from the date of allotment. On April 16 a meeting of the shareholders would be convened for obtaining their approval, said a company release.

Mr Rahul Dhir, Chief Executive officer of Cairn India, said that the company is entering an exciting period of growth. The company is confident of producing first commercial oil from Rajasthan in 2009, he said and added that the private placement will help the company towards meeting its investment plans and provide greater financial and operational flexibility.

Cairn India is currently focused on oil exploration and production and has interest in 14 blocks, two of which are producing hydrocarbons. The company has made a significant oil discovery in Mangala field in Rajasthan 2004. However, it is finding it difficult to evacuate its waxy heavy crude from land lock Rajasthan to the port in Gujarat.

More Stories on : Petroleum | Preferential Allotments | Cairn India Ltd

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