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Cairn India Ltd on Tuesday cleared a share buyback plan of Rs 5,725 crore for 8.9 per cent stake at a price not exceeding Rs 335 a equity share. This is expected to be initiated January next year.
The maximum buyback price represents over four per cent premium compared to the average of the weekly high and low of the closing share price of the company during the last two weeks.
The indicative maximum number of equity shares of Rs 10 each that can be bought back would be 170,895,522, resulting in the reduction of equity capital by approximately 8.9 per cent. The proposed buyback is subject to approval of the shareholders of the company and other regulatory approvals, as may be required.
“The buyback of equity shares of the company would be from its existing shareholders, other than the company's promoters, promoter group, persons in control and persons acting in concert. The buyback would be done from the open market through the stock exchanges, at a price not exceeding Rs 335 a equity share, up to an aggregate amount not exceeding Rs 5,725 crore,” the company said, in a statement.
The company is currently producing over 213,000 barrels of oil equivalent per day (boepd) and is on track to meet year-end target of over 225,000 boepd from all producing assets. The company will be seeking approval of the shareholders of the company by way of a special resolution to be passed through postal ballot as applicable by provisions of the Companies Act.
After it receives the of approval of the shareholders and such other sanctions and approvals as may be required, the company is expected to initiate the buyback process in January.
“The company continues to work on its $ 3 billion capex programme over the next three years till FY16 and is well-placed to develop its current asset base and monetise the existing exploration opportunities with the objective of strengthening its E&P portfolio,” said Sudhir Mathur, CFO, Cairn India.
The company’s shares dropped 2.09 per cent to Rs 324 per share at Bombay Stock Exchange on Tuesday.
