Petronas International Corp., a wholly owned subsidiary of Malaysian state-owned oil and gas producer Petronas, has sold its entire 14.9 percent stake in Cairn India through an accelerated placement that ranks as the largest ever overnight block trade transaction in India. Vedanta’s wholly owned subsidiary Sesa Goa will shell out nearly $1.5 billion (Rs. 6,700 crore) to acquire 10.4 percent in Cairn India at a martket price of Rs. 331 per share. 

Luthra & Luthra advised its long standing client Petronas with a team led by Capital Market Head, Madhurima Mukherjee along with Partner Deepak THM and Associate Rohan Shah.

Bank of America Merril Lynch (BoAML) were the placement agents to this deal. Amarchand & Mangaldas acted as the Indian legal advisor to BoAML with a team led by Managing Partner Cyril Shroff along with Bangalore based Partners Nivedita Rao and Arjun Lall along with Associate Anand Jayachandran.

Clifford Chance acted as the international legal advisor to Merill Lynch with a team led by Partner Rahul Guptan.

Sesa Goa, a subsidiary of Vedanta, purchased 10.4 percent stake out of the 14.9 percent in Cairn India from Petronas. AZB advised Sesa Goa with a team led by Partners Essaji Vahanvati  and Shuva Mandal.  Domestic and foreign financial institutions have purchased the remaining 4.5 percent stake from the Petronas. Sesa Goa has purchased this stake outside of the open offer. Earlier this month SEBI approved Sesa Goa’s open offer for Cairn India after Sesa Goa’s parent Vedanta Resources agreed to change some terms in the open offer document. SEBI required the amended offer document to indicate its dispute with ONGC and disclose that Cairn India has unresolved issues with state-owned ONGC  that could impact stock price.

This block deal is the largest till date and in terms of value, this was over two-and-half times the size of the previous record held by the $780-million block deal for DLF shares, executed in mid-2009. Luthra had advised DLF in the previous block deal of 2009.

Last year, Latham, AZB, S & R and Shepherd and Wedderburn had helped Vedanta seal a $9.6 billion deal to acquire Cairn India. The transaction is still being navigated through various approvals and its dispute with ONGC. Vedanta’s bid for a controlling stake has been held up mainly because of its dispute with ONGC, which holds 30 percent stake in a large oilfield in Rajasthan but pays Cairn's share of royalty.

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