Cairn sells next tranche of Indian shares

Cairn Energy has sold a further 10 per cent stake in its Indian oil and gas operation to mining giant Vedanta Resources for $1.4 billion (£855 million).

The sale of 191.9 million shares leaves Edinburgh-based Cairn holding a majority 52.2 per cent stake in Cairn India, and gives London-listed Vedanta an aggregate 28.5 per cent interest.

Cairn confirmed that it planned to offload a further 30 per cent to Vedanta subject to "approvals from the government of India". Last month, the government gave conditional clearance to the sale of Cairn's Indian oilfields subject to making concessions on a long-running dispute over royalties.

Cairn and Vedanta struck the $9.6bn deal in August 2010, but the deal hit a hurdle due to the lengthy Indian government approval process. Last month, the two firms announced revised terms for the deal, including splitting the sale into two tranches, and the loss of a "non-compete fee", which would bring down the price of Cairn India shares to $7.85 from $8.66.