Vedanta Delays Plans to Raise Cash through Cairn India Stake Sale

The collapse in crude oil prices due to the Covid-19 pandemic has stalled international mining group Vedanta Resources Ltd.’s plans to raise around US$1 billion through the sale of a minority stake in its Indian upstream oil & gas unit.

Vedanta, led by London-based Indian billionaire Anil Agarwal, was considering divesting at least a 20% stake in Cairn India to help cut its US$6.6 billion debt burden. According to reports, Bank of America Merrill Lynch and Barclays had been mandated to run a formal process for the stake sale.

Vedanta spent nearly US$10 billion to acquire a majority 60% controlling stake in Cairn India Ltd. in 2016, acquiring a 51% shareholding in the company from its UK-based parent Cairn Energy Plc and additional shares from the public shareholders through an open offer. Cairn India was subsequently merged with Vedanta the following year.

Cairn India is the largest private sector producer of crude in India and contributes roughly 25% of the nation’s domestic oil production. The company holds interests in 58 exploration & production blocks across the country, according to information available on its website.

“While the stake sale talks can resume when oil prices will stabilize, Vedanta may also explore other fundraising options to reduce its debt,” stated a media report citing unnamed sources. Cairn India’s official spokesperson declined to comment on the status of the planned stake sale.