Vedanta announced Thursday receipt of SEBI clearance to commence the Open Offer for up to 20 percent of the shares of Cairn India. The Open Offer will be made by Vedanta’s subsidiary, Sesa Goa Ltd, and will open for acceptances on Monday April 11, 2011.
To meet Indian takeover regulations, the Open Offer must be made to the minority shareholders of Cairn India and completion of the Open Offer is a condition precedent to the Transaction completing.
Cairn and Vedanta have extended the long stop date in the sale agreement, by which all conditions must be completed or waived (where permitted), to 20 May 2011 in order to accommodate the completion of the Open Offer.
SEBI has also notified Vedanta that the put and call options exercisable by Cairn and Vedanta respectively and the pre-emption right exercisable by Vedanta in connection with the Transaction must be removed from the sale agreement as they do not comply with certain Indian securities regulations.
As a result of this stipulation by SEBI and to allow the Open Offer to proceed, Cairn and Vedanta have agreed that the put and call options shall not be enforceable or exerciseable. Vedanta has also agreed that its pre-emption right shall not be enforceable or exerciseable.
The enforceability of the sale agreement is otherwise unaffected and Cairn looks forward to the successful completion of the Transaction after obtaining all the necessary Government of India approvals and consents.
Immediately following completion of the Transaction, Cairn is expected to have a residual interest of between approximately 10.6 per cent and 21.6 per cent of the fully-diluted share capital of Cairn India.