One of the options suggested to Cairn India was buying the London Stock Exchange-listed Cairn Energy, which has 50 production blocks across the world and a 10 per cent stake in Cairn India (worth Rs 5,818 crore or Rs 58.18 billion according to Friday’s stock price).
The suggestions were made after Cairn India sought bankers views on how it could deploy its extra cash in oil & gas assets across the world.
The company has $2.7 billion (Rs 14,670 crore) of cash and is expected to generate cash flows -- after meeting all the capital expenditure requirements of the Rajasthan block -- of $1 billion every year for the rest of this decade.
The presentations were made to the firm’s top management, led by director and interim CEO P Elango.
Vedanta took over Cairn India in 2010 for $8.6 billion from Cairn Energy, which has a varied shareholding structure, without any single promoter.
The 10 per cent stake in Cairn India made the British firm a very important takeover target for the Vedanta group, an insider said.
A top Vedanta official said this was a 'very old proposal' but no call had yet been taken on the acquisition. Both the sources wished not to be identified.
An official spokesperson of Cairn India declined to comment on the company’s
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