New Delhi : Cairn India said it will spend up to Rs 5,725 crore to buy back shares, a move which would help promoter Anil Agarwal-led Vedanta Group gain greater control over oil producer without putting any money.
Cairn, which is sitting on a cash pile of about USD 3 billion, in a statement said its board has approved buying 17.09 crore shares or 8.9 % of the total shareholding, from open market at no more than Rs 335 apiece. “The maximum Buyback price represents over 4 % premium compared to the average of the weekly high and low of the closing share price of the company during the last two weeks,” it said.
The buyback will start in January after shareholders nod and other sanctions and approvals are in place. Cairn, the largest private oil producer in the country, will offer to buy back shares, including 10.27 % held by its former promoter Cairn Energy Plc of UK, and extinguish them.
After completion, Vedanta Group ownership in Cairn India will rise to 64.53 % from current 58.76 %.