The pre-flotation private placing closed on November 22, 2006 and 209.67 million Cairn India shares have been placed at a price of Rs 176.48 per share, raising a total of Rs 37.0 billion (US$ 822.47 million*). If the flotation price per share is lower than Rs 176.48, the placing price will be reduced accordingly.
The placing is equivalent to 11.88 percent of the issued share capital of Cairn India and, at the placing price, implies a Cairn India market capitalization of approximately Rs 311.54 billion (or approximately US$ 6.92 billion*) following successful completion of the flotation and excluding any exercise of the over-allotment option. The consequent implied valuation for the Company's current interest in Cairn India is US$ 6.32 billion after taking into account the proportion of the gross proceeds to be retained by Cairn India (expected to be approximately US$ 600 million).
The placing is conditional upon, inter alia, the allotment of shares in the flotation occurring prior to February 10, 2007. Preparations remain on track to complete the flotation in December 2006.
The largest investor in the placing is a wholly owned subsidiary of Petroliam Nasional Berhad (PETRONAS), which has subscribed for 176.53 million shares (representing approximately 10% of the post-flotation share capital). The balance of 33.14 million shares are being subscribed for by a combination of Indian and international institutional investors.
As a result of the placing the net offer to the public of shares in Cairn India will be reduced from 538.47 million shares to 328.80 million shares.
Merrill Lynch and ABN AMRO Rothschild have acted as joint co-ordinators in relation to the placing.
Sir Bill Gammell, Chief Executive of Cairn Energy PLC, commented:-
"We are delighted to have gained such substantial backing for our pre-flotation placing. The positive response confirms our belief that this is the best strategy for Cairn to develop and grow our world class business in India."
* Based on a US dollar to Rupee exchange rate of 1:44.99 (source: Financial Times closing mid rate of exchange on November 21, 2006).
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