UK markets close in 5 hours 54 minutes
  • FTSE 100

    7,492.16
    -14.95 (-0.20%)
     
  • FTSE 250

    20,249.36
    -48.64 (-0.24%)
     
  • AIM

    924.53
    +4.75 (+0.52%)
     
  • GBP/EUR

    1.1828
    -0.0030 (-0.25%)
     
  • GBP/USD

    1.2222
    +0.0003 (+0.03%)
     
  • BTC-GBP

    20,028.05
    +1,048.28 (+5.52%)
     
  • CMC Crypto 200

    576.27
    +45.05 (+8.48%)
     
  • S&P 500

    4,210.24
    +87.77 (+2.13%)
     
  • DOW

    33,309.51
    +535.11 (+1.63%)
     
  • CRUDE OIL

    92.58
    +0.65 (+0.71%)
     
  • GOLD FUTURES

    1,805.10
    -8.60 (-0.47%)
     
  • NIKKEI 225

    27,819.33
    -180.63 (-0.65%)
     
  • HANG SENG

    20,082.43
    +471.59 (+2.40%)
     
  • DAX

    13,677.29
    -23.64 (-0.17%)
     
  • CAC 40

    6,519.63
    -3.81 (-0.06%)
     

Cairn Energy to plan special dividend as India agrees to refund $1bn

·2-min read
Workers load medical aid to be flown in an Air India aeroplane to India, at Israel's Ben Gurion Airport near Tel Aviv, on May 4, 2021. - India's total COVID-19 caseload neared 20 million as oxygen shortages in hospitals exacerbated a devastating second wave, and much-needed foreign assistance continued to pour in. (Photo by Menahem KAHANA / POOL / AFP) (Photo by MENAHEM KAHANA/POOL/AFP via Getty Images)
In a filing Cairn said it expects 'to end 2021 net cash positive excluding India proceeds.' Photo: Menahem Kahana/POOL/AFP via Getty

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."

Read more: FTSE falls as Boris Johnson plans national insurance hike

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.

Watch: What is inflation and why is it important?

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting