Cairn India raises $625 Mn via pref issue

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Mumbai: Cairn India has raised Rs 2,534.6 crore ($625 million) through private placements of shares with Petronas and Orient Global Tamarind Fund. Both investors have agreed to purchase a total of 113 million shares of Cairn India at Rs 224.30 per share, which represents a 0.46 percent premium to the average closing price of the share on NSE in the last two trading days. The trade of its stock was closed on Monday at Rs 214.65 on the NSE, from the previous close of Rs 228.40. The board of directors of Cairn India has approved the placements through a preferential issue of 63.3 million equity shares to Petronas and 49.7 million equity shares to Orient Global Tamarind Fund, Singapore. With this private placement, Petronas, has increased its stake in the company from 9.93 percent to 12.7 percent. The Malaysian company had originally picked up the stake in the Indian company just before its IPO in November 2006. Cairn Energy PLC, UK holds 69 percent stake in Cairn India. Cairn India said the net proceeds of the private placement will be used to fund capital expenditure and for general corporate purposes. These shares will be locked in for a period of one year from the date of allotment. On April 16 a meeting of the shareholders would be convened for obtaining their approval, said a company release. Cairn India is currently focused on oil exploration and production and has interest in 14 blocks, two of which are producing hydrocarbons. The company has made a significant oil discovery in Mangala field in Rajasthan 2004. However, it is finding it difficult to evacuate its waxy heavy crude from land lock Rajasthan to the port in Gujarat.

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