Oil minister Jaipal Reddy

New Delhi, May 27: A decision on Cairn stake sale has been lobbed to the cabinet committee on economic affairs which will meet in two week’s time.

The group of ministers today decided to let the CCEA have the final say on the deal involving Cairn India’s stake sale to Anil Agarwal’s Vedanta Resources.

“The group of ministers has taken its own view. This will be presented before the cabinet,” oil minister Jaipal Reddy told reporters after a meeting of the six-member panel, headed by finance minister Pranab Mukherjee.

“The group of ministers is not going to meet again. We will take it to the cabinet committee of economic affairs as soon as possible. The outer limit is two weeks,” Reddy said.

Earlier, the CCEA had referred the issue to the ministerial panel, following differences on whether the deal should be unconditional. The government did not want to be seen to take a decision in a hurry. Reddy said the CCEA would take a call on whether to approve or reject Vedanta’s acquisition of the stake from Cairn India’s Edinburgh-based parent Cairn Energy and whether to impose conditions.

Sources indicated that the group of ministers had recommended conditional clearance such as ONGC’s approval and cess to be paid by Vedanta after the deal. Cairn India is now paying the cess under protest.

Cairn has disputed the excise department’s demand to pay cess under the Oil Industry Development Act; it has been paying it under protest and has resorted to arbitration in the UK. Cairn believes that it need not pay the cess as it is not specifically mentioned in its production sharing contract with the government.

The deal has been delayed nearly 10 months because of a royalty payment dispute between Cairn India and ONGC. The Indian PSU holds a 30 per cent stake in Cairn’s most productive asset in Rajasthan but pays the full royalty, which is under dispute.

Cairn Energy agreed last August to sell a majority stake in Cairn India to London-based Vedanta. Earlier this month, Cairn extended the deal deadline for a second time but did not provide a new date.

Vedanta bond offer

Vedanta Resources today said it had raised $1.65 billion through the private placement of bonds to part-finance the $9.4-billion deal. The bonds were sold in two tranches — $750 million at 6.75 per cent due in 2016 and $900 million at 8.25 per cent due in 2021.