Cairn India to raise $250 mn loan from IFC

Cairn India has approached International Finance Corp for a $250 million loan for development of its oil and gas block in Rajasthan, and to build a 600 km crude oil pipeline, documents disclosed by World Bank’s lending arm showed.

The IFC board is likely to approve the loan by May end. “The new financing is to replace an existing facility that was limited to finance the upstream development,” the IFC report said.

Cairn India to sell 5.37% stake for Rs 2,534cr

Cairn India, the Indian arm of British oil and gas company Cairn Energy, has decided to sell 5.37 per cent stake to Malaysian state oil and gas firm Petroliam Nasional, or Petronas, and Singapore-based Orient Global Tamarind Fund for Rs 2,534 crore ($625 million) to fund expansion plans.

The company will sell a total 113 million shares – 63.3 million shares to Petronas and 49.7 million shares to Tamarind, New Zealand billionaire Richard Chandler’s investment group – at Rs 224.30 each.The share sale price is 1.8 per cent lower than Cairn India’s closing price on March 14 and a 40 per cent premium to its listing price of Rs 160.

Following the share sale, Petronas’ stake in Cairn India will rise to 12.7 per cent, while Orient Global Tamarind will own 2.6 per cent. Cairn India’s holding will be reduced to 64 per cent.The share sale proposal was approved by Cairn India’s board of directors today and will be taken up for shareholders’ approval on April 16.The shares will be locked-in for one year from the date of allotment.

Read more in
The Business Standard article.

IPOs to break all records in June

Come June, the domestic primary market may witness the highest ever capital mobilisation.

Although the exact size and date of the initial public offering (IPO) of DLF and the follow-on issue of ICICI Bank are yet to be announced, marketmen expect these offers will compete head to head for investors’ fund of over Rs 24,000 crore next month.

Real estate major DLF, which took four months to receive market regulator Sebi’s clearance for its public issue, is expected to hit the market by the end of June with an over Rs 13,000 crore issue.However, marketmen expect that the public issue could be of around Rs 11,000 crore, and the remaining part might be raised from private equity investors.

The country’s second largest bank, ICICI Bank, has sought approval from Sebi to sell Rs 17,500 crore of shares to local and overseas investors. The bank has set a target of launching the issue in June. The offer may be raised to Rs 20,100 crore depending on demand, the sale document said.

The two issues are expected to inject buoyancy into the primary market which saw the last big issue in December when Cairn raised Rs 5,261 crore.

Read more in The Business Standard article.

Petrobras, Petroplus in race for Cairn

Interest from Malaysia’s Petronas in Cairn India and Swiss Petroplus in Cairn India’s parent, Cairn Energy, saw the shares of both the companies gaining on the bourses.

Petronas, which already owns 10 per cent of Cairn India through a pre-IPO placement, was now looking to buy out Cairn Energy’s 69 per cent stake in Cairn India, sources said. The takeover talks pushed Cairn’s share price on the BSE to Rs 144.30 on Friday, up 2.3 per cent on Thursday’s close of Rs 139.85.

This was 4.85 per cent higher than the Wednesday’s close of Rs 134.05. At the current price of Rs 144.30 a share, Cairn Energy’s 69 per cent stake would be worth around Rs 17,700 crore.

Finacial Times report that Swiss refiner Petroplus is planning a bid for Cairn Energy, sent the Cairn Energy stock higher by 3.5 per cent to £17.93 a share on the London Stock Exchange on Friday.

Following the news, Citigroup changed its status on both Cairn Energy and Cairn India to “buy”. The research group revised the price target for the Cairn stock from Rs 145 to Rs 185.