Drill for more

Mumbai, Oct. 15: Malaysian oil giant Petronas has bought another 2.3 per cent in Cairn India Ltd for $240 million (about Rs 1,100 crore).

Petronas acquired the stake at a price of Rs 260 per share, which was at a discount of almost 7 per cent to Wednesday’s closing price of Rs 279.35 on the Bombay Stock Exchange.

Petronas’ holding in Cairn India will now go up to 14.94 per cent — just short of a critical threshold that would make it mandatory for it to launch an open offer to Cairn’s minority shareholders at the same price.

For the period ended September 30, the holding of Cairn UK Holdings in Cairn India stood at 64.68 per cent. After the sale, its stake will fall to 62.38 per cent.

In a filing with the stock exchanges, Cairn said the stake was being bought by Petronas International Corporation Ltd (PICL), the overseas arm of Petronas.

Under the terms of the deal, Cairn UK has also agreed to sell to PICL a 10 per cent interest in its existing six operated blocks in offshore Greenland. PICL has an option to increase its interest to 20 per cent in any development in these blocks, in return for payment of a further consideration.

The announcement did not have much of an impact on the Cairn India stock that closed just 0.3 per cent higher at Rs 280.20.

The development comes only a day after Cairn India said it had completed funding arrangements to raise $1.6 billion to finance its Rajasthan project.

Apart from raising $850 million from the State Bank of India, the company will receive around $500 million from Standard Chartered Bank and $250 million from the International Finance Corporation.

Cairn India started crude oil production from its Mangala field in Rajasthan on August 29 and delivered first volumes to MRPL on October 8.