Cairn asks Indian arm to seek shareholders nod for govt riders

Aftershowing signs that it was willing to agree to government riders to save itsdeal with Vedanta Resources, UK'sCairn Energy has asked its Indian unit to convene a shareholders meet to voteon the preconditions set for approval of the $9 billion transaction.

Cairn Energy holds 52.2 per cent stake in Cairn India andtogether with Vedanta's 28.5 per cent, it commands three-fourth of votingrights that can see any resolution through.

The Board of Cairn India had on February 10 passedresolution opposing change in contract to make the company liable for paymentof royalty and cess on oil produced on its showpiece Rajasthan fields asprecondition for approving its parent Cairn Energy selling 40 per cent stake toVedanta.

Cairn Indiahad then felt that the riders were against the interest of the company and itsshareholders especially minority shareholders.

But on Tuesday at its board meeting in Edinburgh,Cairn Indiaboard decided to seek shareholder approval for the riders through postalballot.

"The company has received a requisition" fromCairn Energy "on July 21, 2011 under Section 169 of The Companies Act,1956, to convene an extraordinary general meeting of the company to consider theconditions imposed by the government of India," Cairn India said in apress statement.