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(Alliance News) - Cairn Energy PLC on Monday said it will launch a GBP20.0 million share repurchase scheme, ahead of a chunkier buyback once it lands the funds from a tax refund in India.
The GBP20.0 million in repurchases began on Monday and conclude no later than January 31. The programme is being run by US investment bank Morgan Stanley.
"This programme is being initiated prior to the anticipated larger buyback programme to commence following receipt of the Indian tax refund," Cairn explained.
Cairn earlier in November noted that its previously announced special dividend is expected to be paid by early 2022. Cairn in September had said the return would be made up of a USD500 million special dividend and USD200 million in share buybacks.
The Edinburgh-based oil and gas exploration company earlier this month had said recently introduced legislation in New Delhi is to clear the way for Cairn to receive a INR79 billion, about GBP790.9 million, tax refund from the government of India.
The taxation amendment act nullifies the tax assessment originally levied against the company by India in January 2016, Cairn said at the time.
The FTSE 250 company has been involved in a long-running battle with India which stemmed from a 2012 law. In 2014, Indian tax authorities used the new legislation to claim unpaid taxes from Cairn India's 2006 corporate reorganisation.
In response, Cairn commenced arbitration proceedings against the Indian government.
Cairn shares were 3.9% higher at 190.25 pence each in London on Monday morning.
By Eric Cunha; ericcunha@alliancenews.com
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