Crain Energy issues shares to CIL at same price as IPO

Cairn Energy, which has drawn up major plans of establishing its Indian chapter, has got the Foreign Investment Promotion Board (FIPB) clearance to acquire shares of its Indian arm Cairn India (CIL).
The company will issue shares to CIL at the same price as the IPO share price. With this approval, the two companies will be able to enter into a share swap aggregating to 70% of the post-IPO capital. The proposed move will involve financial transactions to the tune of $1bn between the two companies.
The proposal was made by the company as it planned to have a publicly quoted subsidiary in India which will help in sharing production costs. Cairn has discovered large reserves in Rajasthan and is keen to start commercial production there. Since the move involves huge investments, the company will also allow national and international investors to make investments in the Indian arm.

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