The announcement was made during trading hours today, 27 December 2011.

Meanwhile, the BSE Sensex was up 4.72 points, or 0.03%, to 15,975.47.

On BSE, 1.89 lakh shares were traded in the counter compared with average volume of 2.51 lakh shares over the past two weeks.

The stock hit a high of Rs 244.80 and a low of Rs 235.80 so far during the day.

Varun group, which holds exploration rights for a 6,884 square kilometre onshore oil block at Madagascar, has entered into a joint venture co-operation agreement with Sure King Varun Hong Kong (SKVHL). SKVHL is a special purpose vehicle (SPV) formed at Hong Kong between Varun group and Da Qing Oil Field Company, a leading oil firm in China.

Under the agreement, Varun group has agreed to cede 51% of its stake in the oil field to Da Qing group of China through the above SPV.

Da Qing group has committed to arrange for oil exploration and necessary fund raising process for the program and pay $150 million as upfront money towards consideration to Varun group for ceding 51% stake in the block.

Varun Industries said with the above arrangement Varun group will have the twin benefit of getting continued revenue through oil exploration process and also have liquidity which the Indian group proposes to utilise for other previously programmed capex needs.

Apart from the above, SKVHL, the SPV in which Varun holds 49% stake, will be able to leverage on the strong presence of Da Qing group to trade in oil sector.

Kiran Mehta, chairman and managing director, Varun Industries said, “We are very excited about this partnership, which would open a new chapter in Varun's growth story. This is one of the major steps towards unlocking the value of our varied assets in Madagascar. This development gives us the confidence and strength to nurture and develop our other Madagascar assets. We are optimistic about other assets in Madagascar where group will continue creating wealth for its stakeholders. The is an ideal step towards realising our vision of becoming a diversified business conglomerate.

Net profit of Varun Industries rose 24.37% to Rs 15.41 on 2.01% rise in net sales to Rs 903.60 crore in the quarter ended September 2011 over the quarter ended September 2010.

Varun Industries is a global conglomerate of businesses that includes stainless steel raw materials, steelware, mining, wind energy, oil & gas, gems and jewellery, commodity trading, etc. The company has a leading presence in the stainless steel ware category. Varun Industries has a major presence in Madagascar, where it is involved in a slew of enterprises ranging from oil & gas exploration to gems and mineral extraction.