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Petronas stake in Cairn
Rich pickings
Petronas picks up 10% in Cairn India in pre-IPO private placement
Price: Rs 176.48 per share for 176.53 million shares
Other investors, including Videocon, scoop up 33.14 million shares
Private placement reduces public offer to 328.80 million shares

New Delhi, Nov. 23: Petronas of Malaysia has picked up about 10 per cent stake in Cairn India Ltd, the subsidiary of Scottish oil firm Cairn Energy Plc. The company expects to list on the Bombay stock exchange by the end` of next month.

Petronas bought 176.53 million shares of Cairn India in a pre-IPO private placement, according to a Cairn press statement here.

“The pre-flotation private placing closed on November 22 and 209.67 million shares of Cairn India have been placed at a price of Rs 176.48 per share, raising a total of Rs 3,700 crore ($822.47 million),” the release said.

The bulk of the shares in the private placement was bought by the subsidiary of Petronas. Its 176.53 million shares represent approximately 10 per cent of the post-flotation share capital of Cairn India.

The balance 33.14 million shares were bought by a clutch of Indian and international institutional investors, including Videocon.

The private placement has reduced the net offer to the public to 328.80 million shares from 538.47 million.

A senior official said the company has already informed the government of their upcoming IPO.

Cairn plans to raise at least $1.8 billion by selling 538.47 million shares of Cairn India through the proposed initial public offering (IPO).

Cairn Energy Plc chief executive Bill Gammell said: “We are delighted to have gained such substantial backing for our pre-flotation placing. The positive response confirms our belief that this is the best strategy for Cairn to develop and grow our world class business in India.”

Cairn will utilise about $1.5 billion of the $1.8 billion to develop its four oilfields in Rajasthan.

The company has stakes in nine exploration and production areas in India, and its partners include ONGC.

The company has already signed an agreement to borrow $1 billion from a consortium of foreign banks. It plans to list on the BSE either in the last quarter of 2006 or in the first quarter of 2007 “subject to market conditions.”

Gammel said the company would start commercial production by the end of 2008. The peak output is 150,000 barrels daily.

The Cairn Energy CEO said the company expected revenues of $40 billion from an investment of $4 billion. The estimated reserves in Rajasthan is a massive 600 million barrels.

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