Cairn Energy to update investors on $1.2 billion Indian award
Investors will be looking for an update on progress with Cairn Energy’s $1.2 billion (£970 million) arbitration award against the Indian government when it reports full-year figures this week.
In December, the Edinburgh-headquartered firm announced that an international tribunal had ruled in its favour in the tax case, which centred on restructuring it undertook ahead of the flotation of its Indian arm in 2007.
The tribunal ruled “unanimously” that India had breached its obligations to Cairn under the treaty and awarded it the significant damages.
However, India has not yet paid up and reports emerged two weeks ago that Cairn had increased pressure on the government there by filing a lawsuit in the US.
If Cairn wins the case it could open the way for it seizing Indian assets overseas to recover money owed.
Cairn began proceedings against India in 2015 following retrospective taxation actions undertaken by the country’s income tax department a year earlier.
The business recently returned $250m to shareholders after selling off its Senegalese assets to Australian firm Woodside Energy.
Cairn will receive some $525m in cash, comprising $300m from the sale and a further $225m payment to reimburse it for expenditure related to the assets since January 1.
The group will also receive an additional payment of up to $100m if certain conditions are met relating to the date of first production from the Sangomar development and the prevailing oil price at that time.
In September, Cairn gave an upbeat outlook on prospects despite posting hefty first-half losses.