Mittal appoints Merrill Lynch for Cairn

Vol 11, PW 15 (15 Nov 07) News in Brief

Billionaire steel baron LN Mittal is rumoured to be moving ahead to expand his oil business in India.

Banking circles are alive with rumours that Mittal has appointed Merrill Lynch to carry out due diligence of Cairn Energy’s assets in South Asia, including its 69% stake in Cairn India, listed on the Mumbai Stock Exchange and owner of the Mangala field in Rajasthan. “Mittal sees Rajasthan as the logical source of crude for Bhatinda,â€‌ we hear.

“Bhatinda can be configured to process the sort of waxy crude that the Rajasthan fields will produce.â€‌ In February this year Mittal announced he was investing Rs3200cr ($730m) for 49% of HPCL’s proposed 9m t/y (170,000 b/d) refinery at Bhatinda in Punjab.

Mittal, it seems, also considered buying UK-listed Cairn Energy, whose share price he thinks is trading 38% below its true value. But Cairn’s UK promoters aren’t interested.

“Cairn Energy,â€‌ we hear, “thinks it better to sell Cairn India and Capricorn Energy than the parent company.â€‌