ONGCIn signs of a souring relationship, state-owned Oil and Natural Gas Corp (ONGC) has withheld consent for internal restructuring of Cairn India Ltd for the past one year. Cairn wants the stakes that its different subsidiaries, including some registered abroad, hold in various oil and gas properties, including the showpiece Rajasthan oilfields, to be transfered into one India-based company. Since ONGC is partner in six of those properties, Cairn procedurally sought a no-objection from ONGC, but the state-run oil giant has so far not agreed to the proposal, sources privy to the development said. The restructuring is separate from London-listed mining group Vedanta Resources' USD 9 billion buyout of Cairn India. While the Vedanta deal, where Edinburgh-based Cairn Energy Plc is selling 40 per cent of its interest in Cairn India, was announced in August, 2010, the restructuring began in 2009.
When contacted, two top ONGC officials were not aware why the consent was withheld. Sources said the restructuring, which was approved by the board of Cairn India and boards of its subsidiaries in December, 2009, has no bearing on the Vedanta deal. In December, 2009, itself, Cairn got no-objection certificates for the restructuring from the National Stock Exchange (NSE) and Bombay Stock Exchange , where it is listed, and the company's shareholders approved the scheme in February, 2010. In April last year, the Chennai High Court approved the scheme of restructuring and the Bombay High Court sanctioned the scheme in June, 2010.
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