Standard Chartered to Lend $5 Billion to Vedanta to Help Purchase Cairn

Standard Chartered Plc will provide as much as $5 billion in loans to Vedanta Resources Plc for its proposed acquisition of a controlling stake in Cairn India Ltd., two people with knowledge of the matter said.

The U.K. bank will extend loans to a special purpose vehicle formed by Vedanta, one of the people said, declining to be named before a public announcement. Credit Suisse Group AG may also provide as much as $2 billion, another person said.

Standard Chartered, the first overseas bank to sell shares in India, is the second-ranked merger adviser in the country, including providing financing for Bharti Airtel Ltd.’s $10.7 billion purchase of Zain Africa BV, according to Bloomberg data.

Arijit De, a spokesman for Standard Chartered in Mumbai, wasn’t immediately available on his mobile phone. Adam Harper, Credit Suisse’s spokesman in Hong Kong, declined to comment. A spokesman for Vedanta in London wasn’t immediately available.

Vedanta, controlled by Indian billionaire Anil Agarwal, today agreed to buy as much as 60 percent of Cairn Energy Plc’s India unit in a deal worth $9.6 billion to gain access to the nation’s biggest onshore oil field.

Goldman Sachs Group Inc. will also help fund the purchase, which will need as much as $6.5 billion in bank loans, the London-based miner said today.

Sesa Goa Ltd., also controlled by Agarwal, will spend about $3 billion from its cash holdings for a 20 percent stake in Cairn India, Managing Director Prasun Kumar Mukherjee said today.

Standard Chartered, JPMorgan Cazenove and Morgan Stanley are the joint lead financial advisers, Vedanta said in the statement. The bank debt will have a tenure of at least two years, the mining company said.

To contact the reporter on this story: George Smith Alexander in Mumbai galexander11@bloomberg.net