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Cairn India plans buyback

Cairn India Ltd. today announced that its board of directors approved a proposal for the buyback of equity shares of the company from its existing shareholders.

Cairn India Ltd. today announced that its board of directors approved a proposal for the buyback of equity shares of the company from its existing shareholders.

The buyback would be done from the open market through the stock exchanges, at a price not exceeding Rs. 335/equity share, up to an aggregate amount not exceeding Rs. 5,725 crores. The maximum buyback price represents a 4% premium compared to the average of the weekly high and low of the closing share price of the company during the last two weeks.

With the above mentioned limits of the proposed buyback, the 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%.

The buyback comes on the backdrop of strong cash flows generated by Cairn India, which is currently producing over 213,000 boe/d and is on track to meet year-end target of over 225,000 boe/d from all producing assets.

The proposed buyback is subject to approval of the shareholders by way of a special resolution to be passed through postal ballot as per applicable provisions of the Companies Act, the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998 and other applicable provisions. Following approval of the shareholders, Cairn India said it would begin the buyback process in January 2014.

CFO Sudhir Mathur, who joined Cairn India in 2012 and holds a MBA from Cornell University, said, "The company continues to work on its US$3 billion capex program over next three years till FY16 and is well placed to develop its current asset base and monetize the existing exploration opportunities with the objective of strengthening its E&P portfolio.”

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