Member Info for 34adsaddsa

I got mine today from two different brokers.

We're set to be at 55k soon. I don't think they should invest more given payment failures etc. Leave it at 55k and milk it.

20% dividend yield?

I'm sure they've been blindsided by this. We're owed 1.7B. This looks more like 1B.

I'm sure any attempts to negotiate more than that will be rebuffed by the Indian government. It's really the minimum number management could possibly accept. I'm sure most here want them to accept it, I guess I do as well but it's not easy but the alternative seems grim.

The market cap you're quoting is in sterling, not dollars.

No. We're not talking about getting the full $1.7B. £2.60ish fair value.

True, although there may be UK tax to pay on some of that. Clearly massively undervalued anyway.

It would just be to say they take note. Lack of interest, costs and depreciation of the rupee means they won't whole heartedly accept it until they were involved in a backroom deal to agree to it (I doubt they were)

The money was seized in Indian rupees. Not dollars. The rupee has fallen against the dollar since 2015 so we're looking at less in dollar terms.

"In 2015, the tax authorities seized Cairn Energy’s residual shareholding of about 10 per cent of Cairn India, which was then valued at about $1 billion. During the arbitration, the government also seized dividends totalling Rs 1,140 crore due from its minority holding in Cairn India (now a part of Vedanta Ltd) and set off a Rs 1,590-crore tax refund against the demand."

I think we'd get all of that back. I think Cairn should take it.

They probably don't even know yet.

Not over £3. This would be about £860M pre any UK taxes.

Does that guy still want to sell it for 20p in the £?

I'm just joking :-)

Downside is that I think they're very unlikely to move on the interests and costs.

Could go up 50% on this. I'm not kidding.

I'm not sure if people are aware of this, but it isn't even a proper appeal, it's an appeal to have it set aside. It would only happen if there has been some serious irregularities etc. It's not like they redo the case from the start, it's more like checking the process.

Timescales will depend on the personalities and political/social preferences of a handful of people. There's really no way of knowing.

That's why I'm a shareholder. I'm trying to convey that wanting to sell something for a pittance because it isn't reflected in the share price is not good thinking.

Now if you think 20p is a good price and Cairn will wait for years to get a higher amount from anyone else than that's a different story and fair enough.

If the shares fall to 110, would you advocate selling it for 10p in the £? What about if they rise to 150, would you then want 30p in the £? It's a silly way of thinking.

The money due from India is the reason to be bullish here. If only 20% of that money is received then it's just a risky E&P rather than a special situation with a good margin of safety.

Even the Indian government offered them more than that after the ruling by asking Cairn to participate in their Vivad se Vishwas scheme.

Sell it for 20p in the £? I don't think so.

I have come to a few conclusions:

1. India has 0% chance of a successful appeal.
2. India has two ways to defend itself against asset seizures: Invoking sovereign immunity and claiming the assets are independent of the Indian Government. The sovereign immunity argument can protect assets like embassies but won't protect much else. The argument that assets are independent of the Indian government is potentially more of a problem for Cairn. It's a way to protect state owned enterprises like Air India and Shipping Corporation of India. We need to establish in court that they are an 'alter ego' of the Indian government. That really depends on the amount of control India has over those companies and their day to day operations. From what I've read it's a high bar to prove it but there's lots of evidence on our side. The flats in France seem like low hanging fruit. AFAIK they're directly owned by the Indian Government and a sovereign immunity defence won't work.
3. This situation is very bad for India, and it will continue to be very bad until it is resolved. Any assets outside India will always be at risk. They won't be able to conduct their affairs in a natural way because multiple parties will try to get courts in dozens and dozens of countries to freeze them and they'll be continually sucked into litigation, most of which they will end up losing. That creates hassle, costs and damages India's image.
4. I don't think India will ever voluntarily pay the entire amount. It's an ego thing. They're too far down the rabbit hole to admit they've screwed up so badly. We'll either have to negotiate and accept a somewhat lower amount or forcibly recoup our money.
5. Forcibly recouping our money doesn't necessarily mean confiscating assets and selling them. If we get an order against Air India in some big countries we could essentially shut down the airline because if any planes land in the country they can be seized.
5. During the arbitration proceedings, Cairn claimed that they would probably have to pay UK corporation tax on money received due to the ruling and they argued that India should have to provide money to cover that tax cost. The arbitration court didn't allow that because they said Cairn hadn't sufficiently proved that tax would be due. I'm guessing it probably will be. We could offset some of that with the accumulated UK tax losses but I don't know how large those are. Might that be part of the reason why the UK assets have been sold, to preserve the losses so they can be soaked up by the India payment?
6. I think the Indian finance minister knows they're in a terrible position but can't say it. By hook or by crook I think we'll end up recouping 80%+ of the $1.7B we're owed. Given that, I think the shares are very cheap. I think we'll wake up one day and they're massively up, either due to a big court ruling or a settlement agreement.

It's difficult to believe they care much about flaring from a climate change point of view. Obviously they'd care if it causes pollution/health problems for the local population but I haven't heard that it does.