State firms not to counter Vedanta on Cairn - source
The news about the withdrawal of the joint counter-bid by government operated energy companies GAIL, ONGC and Oil India against the $9.6 billion share acquisition of Cairn India by Vedanta group has been confirmed by a senior official of the Oil Ministry of India.
The much talked about joint bid has been finally called off owing to the very high bid made by Vedanta though quite a number of informal discussions had been held amongst the three firms.
But still any deal by Cairn India would need the government's sanction in accordance with the production sharing contracts between Cairn India and the government and a clause of the agreement states that any alteration in the company's proprietorship would require government's consent.
While Cairn Energy's Chairman is present at New Delhi to have discussions with the government bureaucrats regarding the procurement, the government has supplemented the already existing hurdles in the path of the Vedanta group in relation to the Cairn India purchase by declining the firm's proposal of excavating bauxite in one of the states in the east.
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