Cairn said to sell stake in India

New Delhi Cairn Energy Plc raised Rs20.6 billion (Dh1.3 billion) selling a stake in Cairn India Ltd, operator of the nation's biggest oil deposit on land, at the lower end of its proposed price range, said a person with direct knowledge of the matter.

The company sold the stake at Rs308.73 a share, said the person. Cairn Energy sold 66.76 million shares, or a 3.5 per cent stake in the Indian company, it said in a regulatory filing, without disclosing the price. The Edinburgh-based company had planned to sell the shares in the 307.4 rupees to 317.5 rupees range, according to offer terms yesterday.

Cairn India had the steepest fall in more than three months after the shares were sold at a discount of 6.6 per cent to the stock's average share price this quarter. The proceeds will help the UK oil explorer, with assets from Greenland to Nepal, finance its "stated strategy and provide greater operational flexibility," according to the statement.

"The stock is falling to the range indicated by Cairn Energy," said Sandeep Randery, an analyst with Brics Securities Ltd in Mumbai. "Cairn Energy had to offer a discount to sell all these shares because the markets have been so sluggish."

Cairn India fell 5.7 per cent to Rs308.7 in Mumbai. The benchmark Sensex gained 2.2 per cent, while Cairn Energy gained 2.3 per cent in London.

The Scottish company will own 18.3 per cent of Cairn India after Friday's sale. Vedanta Resources Plc, a London-based metals and mining company, and unit Sesa Goa Ltd completed buying a 59 per cent stake in Cairn India from Cairn Energy and other shareholders for $8.67 billion (Dh31.8 billion) in December.

Citigroup Inc helped sell the shares, according to today's statement from Cairn Energy. The identity of the buyer wasn't immediately known.