Delicate issue

New Delhi, May 5: The ministerial panel headed by finance minister Pranab Mukherjee is unlikely to rush to clear the $9.6-billion Cairn India stake sale to London listed Vedanta Resources by May 20, the deadline set by Edinburgh-based Cairn Energy to sell its Indian asset.

Senior oil ministry officials said the group of ministers (GoM) was unlikely to give clearance to the deal in such a tight time frame. It will have to analyse the impact of the stake sale on the country’s interest and on state-run Oil and Natural Gas Corporation.

Analysts said the government would not be taking any decision that hinted at favouritism as it was already facing ire over corruption in the allocation of telecom licences.

Vedanta Group today expressed confidence that the deal would be closed “as soon as possible” and said it would acquire 58.5 per cent in the Indian arm of Edinburgh-based Cairn Energy for $9.4 billion after completion of the open offer by its subsidiary Sesa Goa.

“We will be happy to close this transaction as soon as possible. The government has set up a body to evaluate this transaction,” Vedanta CEO M. S. Mehta said.

The stake sale was referred by the cabinet to GoM, following “nuanced differences” among ministers looking into the deal.

The panel will study the transaction and a dispute over royalty payments.

“We expect that the government will not link royalty issue with the deal,” Vedanta chairman Anil Agarwal said in London today. “It is a clear deal between two firms — Vedanta Resources and Cairn Energy Plc.”

Both the firms have set a deadline to wrap up the deal by May 20 after extending the initial deadline of April 15.

The first meeting of the GoM, which was to be held last Monday, was postponed and a new date has not yet been fixed.