UPDATE 2-Vedanta to buy stake in Cairn India for $8.5-9.6bln

* Vedanta says to buy 51-60 pct of Cairn India

* Transaction to be funded through debt and cash

* Cairn says to sell 40-51 pct Cairn India

* Miner to buy up to 20 pct of Cairn India in open offer

(Adds details)

By Julie Crust

LONDON, Aug 16 (BestGrowthStock) – India-focused miner Vedanta
Resources (VED.L: ) said it will buy 51-60 percent of Cairn India
(CAIL.BO: ) for about $8.5-9.6 billion in cash to be funded with
debt and cash.

Edinburgh-based Cairn Energy (CNE.L: ), which holds 62.4
percent of Cairn India, said in a separate statement that it
will sell between 40-51 percent of its stake to Vedanta. The
miner will make up the rest through an open offer to buy up to
20 percent of Cairn India from shareholders.

Cairn India’s main asset is a 70 percent stake in the
Rajasthan oil development project that holds an estimated 6.5
billion barrels of oil and gas.

The Mumbai-listed company is producing about 125,000 barrels
of oil per day (bopd) and Vendanta said Cairn India has the
potential to produce more than 240,000 bopd, around 25 percent
of India’s production.

Cairn Energy said it plans to return a “substantial amount”
of the sale proceeds to its shareholders and use part of the
cash to fund its exploration and appraisal programmes.

Cairn said it expects to complete the deal before the end of
2010, while Vedanta has been more conservative and is targetting
the first quarter of 2011.
(Editing by Tom Bergin and Louise Heavens)

UPDATE 2-Vedanta to buy stake in Cairn India for $8.5-9.6bln