
British oil and gas firm Cairn Energy says it expects to return up to $700m to shareholders as it makes “progress in resolving” a longstanding tax dispute with the Indian government.
The company said Tuesday that a “near term India resolution” would enable shareholder returns via a $500m special dividend and $200m buyback, subject to approval.
“The Indian government is very focused on resolving this as quickly as possible and they're targeting completion within the next few weeks,” chief executive Simon Thomson added on a conference call today.
Tax battle
The dispute is over retrospective taxation measures which were introduced in 2012 but are now set to be rescinded by India’s parliament last month.
In 2020, an international arbitration tribunal ordered India to pay Cairn around $1.7bn in compensation for the seizure of its stake in Cairn India in 2014.
In July, Cairn said it had effectively seized 20 Indian government properties in Paris.
It had been pursuing options to seize further assets, but a resolution to the dispute would see the Indian government pay it the remaining $1.06 billion, Thomson clarified on the call today.
Outlook update
Cairn also said today it forecast net capital expenditure of $125m this year, and expected to end 2021 net cash position excluding the India proceeds.
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It plans to complete a $646m acquisition of assets in Egypt in the third quarter of 2021.
Shares in the company were up 0.51% on the London Stock Exchange by 13:00 BST, after spiking 2.3% at 08:05.