Yahoo Finance Cairn Energy to plan special dividend as India agrees to refund $1bn
Oil and gas group Cairn Energy (CNE.L) said in its half-year report on Tuesday that it expects to return "up to $700m" to investors via a special dividend and buyback, as it closes in on a settlement of a long-running dispute with the Indian government.
The tax arbitration, which exceeded $1bn (£724m), came to a conclusion after India's government in August approved a bill that would rescind a 2012 amendment which let it pursue taxes retrospectively.
Cairn, Vodafone (VOD.L) and more than 10 other companies were implicated in what had turned into a mounting issue for the country's prime minister.
Narendra Modi's government had been ordered to pay Cairn roughly $1.7bn in compensation following a seizure of its stake in Cairn India in 2014 — an amount that was refused by New Delhi. Cairn then attempted to target billions in overseas government assets.
In a filing Cairn said it expects "to end 2021 net cash positive excluding India proceeds."
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Cairn offered the resolution of the dispute as a highlight of its half-year results, in which the company also said it was moving towards a net-zero energy transition.
It said it had a "roadmap developed with key senior appointments to deliver Cairn's energy transition strategy."
The money to be returned to shareholders will be handed out via a dividend of $500m and a share buyback programme, where the company buys up shares on the open market, for $200m.
The rest of the money will be used to expand the business, which also announced plans to buy Shell’s (RDSB.L) western desert assets in Egypt.
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