Vedanta Resources will buy another 10 per cent in the Indian arm of Cairn Energy as part of a restructuring of the much-delayed deal that will result in a $600 million reduction in the price tag.
The rejig was necessitated because the Anil Agarwal-led company had agreed that a part of the taxes paid by the 30 per cent shareholder, state-run explorer ONGC, could be deducted from revenues, according to three people with direct knowledge of the matter. The tax, known as royalty, is currently paid entirely by ONGC and the government had insisted that its burden had to be reduced before it approved the deal.
Meanwhile, more than 10 months after the deal was first struck, the CCEA, headed by Prime Minister Manmohan Singh, gave approval to Cairn Energy for selling its Indian unit to Vedanta Resources, subject to the new owner agreeing to share royalty and pay oil cess on mainstay Rajasthan oilfields.
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