Cairn India will raise approximately Rs 2,534.60 crore ($625 million) through a private placement with Petronas and Orient Global Tamarind Fund. The investors have agreed to purchase a total of 113 million shares of Cairn India at Rs 224.30 per share.
The net proceeds of the private placement will be used to fund capital expenditure and for general corporate purposes.
According to a release issued by Cairn India to the BSE today, the company board has approved the placement through a preferential issue of 63.30 million equity shares of Rs 10 each at a price of Rs 224.30 per share to Petronas. Orient Global Tamarind Fund will be issued and alloted 49.70 million equity shares at the same price.
These shares will be locked in for a period of one year from the date of allotment. Following the private placement, Petronas will own approximately 12.7%, of the equity share capital of Cairn India as enlarged by the private placement and Orient Global Tamarind Fund will own approximately 2.6% of the enlarged equity share capital of Cairn India.
Rahul Dhir Chief Executive officer of Cairn India said: “The company is confident of producing first commercial oil from Rajasthan in 2009. The private placement will help the company towards meeting its investment plans and provide greater financial and operational flexibility. We are delighted to have investors like Petronas and Orient Global show their commitment to subscribe to Cairn India's business.”
Source: Business Standard