(Bloomberg) -- Cairn Energy Plc is ending its multiyear tax spat with India, promising shareholders a payout by early 2022.
The oil and gas producer, which is set to receive about $1.06 billion in the settlement, said Wednesday it had entered negotiations with the Indian government, moving “toward expediting the refund.”
Cairn will end all legal proceedings against the country, expecting to pay shareholders a special dividend “by early 2022.” Shares rose as much as 3.9% in London, extending this week's gains. They were trading 0.2% higher at 1:20 p.m. local time.
Cairn, Vodafone Wins Make India Scrap ‘Nightmare' Tax
India issued Cairn with tax claims six years ago, and in 2020 the company won an international arbitration against the country's government. However, the funds weren't forthcoming. India opened the way to a resolution only this year, after scrapping a rule on retroactive taxes that had triggered billions of dollars of battles with international companies including Cairn and Vodafone Group Plc.
In September, Cairn said shareholders can expect as much as $500 million in special dividends and a buyback of as much as $200 million. The company planned to spend the remaining proceeds on its assets. To be eligible for the refund, Cairn said at the time that it will be required to withdraw its arbitration award claim, interest and costs, and end all legal enforcement actions.
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