Member Info for JEF_NIC

Thanks RagstoRich,

This looks extremely promising and I am now perplexed as to why the share price hasn't made a significant move up.

"...Cairn had on Sunday stated that it will "begin meetings this week with shareholders in the UK and US, with the international arbitration award high on the agenda.""

1. “We encourage both parties to reach a swift settlement," Ellis told reporters in New Delhi in response to a question on recent talks between the Indian government and Cairn Energy CEO Simon Thomson last month. “One thing that strikes me, coming here, is that India has huge ambitions about infrastructure for example and the transformation that needs to take place in the country requires capital, both domestic capital and foreign capital. So creating an environment where foreign capital comes to the country I think is really important. That’s a more general remark," he said.

2. It is my duty to appeal: FM Sitharaman on Cairn arbitration award.

3. CEO extract from latest tweet: "...Notwithstanding and without prejudice to our rights under the international arbitration award, we have discussed a number of proposals with the aim of finding a swift resolution that could be mutually acceptable to the Government of India and the interests of Cairn’s shareholders."

Its difficult to establish what India's next move will be, but it seems to me that India's Finance Minister has now adopted a more assertive tone to her speech.

Cairn CEO Simon Thomson said in a Twitter post:
"Our shareholders are watching," . "They expect India to honour its obligations and to quickly bring this matter to a conclusion and if India do not do that, and if India delay, then our shareholders expect us to pursue our strong powers of enforcement which we have to do".

"strong powers of enforcement" in my view this seems somewhat confrontational and it looks like we'll have to wait for the US court to make ruling on recognizing the arbitration award. Does anyone have any idea how we can view progress of the US court review on the case ?

ALL IMO, GLA

It seems increasingly likely that Cairn and India are close to reaching a settlement. I agree that the offer will be in the $600 milions region. 50% of principle (minus interest&cost) which I believe is one of India's tax schemes.

I think India is adamant not to allow its tax laws of being undermined. Cairn has to make a concession or risk of a protracted legal battle with India. From India's point of view, Its imperative not allow Cairn case set precedence , as it may encourage other companies with pursuing legal action to dispute India's tax laws.

If India does not comply with the order of the tribunal at the Permanent Court of Arbitration in The Hague, it would be a violation of international rules on arbitral awards, commonly called the New York Convention. Options before the Indian government are limited. An appeal against the award in a court in The Hague may not yield positive results as the tribunal had given a very detailed 582-page order to make it "as bullet-proof" as possible.

In contrast, the September 2020 arbitration award in UK''s Vodafone Group challenge to retro tax demand was only 100 pages.

I agree with your comments Beef, it may take some time before GOI succumbs to pressure. Though, I can see this happening if the American court makes a ruling in our favour. GLA

"While the tax department is in favour of challenging the ruling of the Permanent Court of Arbitration, many others including the political leadership are aware of what it would mean for investor sentiment,” the official saidIt seems the political leadership wants to resolve the issue.... the longer they wait the more damage it causes investors' sentiments. Why would anyone invest in India if international law is not respected, and its the 5th largest economy by GDP. What a joke. Cairn invested in building infrastructure, create jobs and generated more than $20 billions in revenue to India. I am shareholder, but I do feel for Cairns management that this must a real kick in the teeth.

Over the course of last 2 weeks Enquest at one point jumped 45% on rise of POO. Cairn has hardly made a move. Its been stagnant since news of the arbitration award.

The more POO goes up the less the award is factored in. Its was above £2 when POO was sub 50s with more shares in circulation.

ImO, Whatever India offers, Cairn MCap should rise by roughly the amount being offered. GLA

"We had a constructive dialogue and the dialogue is ongoing," Thomson told reporters after meeting Finance Secretary Ajay Bhushan Pandey.

"The Indian government is going to offer the company an out-of-court settlement in the meeting, a person familiar with the matter said on the condition of anonymity citing sensitivity around the issue. The meeting will serve as an opportunity for the company to “settle” the long-pending matter, as the government plans to appeal against the three-member international arbitration tribunal order made in December, the person said."

Government May Seek Out-Of-Court Settlement With Cairn Energy... interesting day tomorrow!

Cairn Energy CEO Simon Thomson is looking forward to meeting the Government of India Finance Minister in Delhi next week

India's finance minister did not mention Cairn in her 500 billion budget. I think few traders took a position yesterday morning prior to release of her budget. Now they are exiting as their anticipation failed to materialise. Hence the surge and subsequent drop yesterday.Good riddance I say.Now we just have to wait. IMO india doesn't have the financial bandwidth to make such a huge payout. I think GOI is currently negotiating an arrangement with Cairn; half cash half in assets in the form of oil fields. Recent reports on giving up oil fields to Cairn supports this theory. I suppose we'll find out before/on the 6th of March. GLAGLA

India’s retroactive taxation of the 2006 transactions was grossly unfair. Indian Income Tax Department was enforcing its retrospective tax claim against Cairn whilst the Treaty arbitration had been ongoing. They were quick to seize Cairn assets.

Not honouring the arbitration settlement will do nothing for an already business-unfriendly reputation. IMO, India has a small window to bring this matter into a quick resolution. The roles have now reversed and Cairn is now in a position of strength.

GLA

Well... I think you have made an important omission from their recommendation!

Barclays believed it was only that, "a question of when rather than if".

Short term traders have bought hoping for a quick profit this is unlikely to materialize as you cannot beat MM in their game.
Sadly short term doesn't look very bullish but I remain bullish in the long term. Bare in mind, that Cairn has now been equipped with the legal tools to pursue the funds.

RNS 29/9:
"The Treaty affords strong provisions to enforce a successful award and a decision of the Tribunal under the terms of the Bilateral Investment Treaty is binding on both parties."

Warren Buffett: "the stock market is a device for transferring money from the impatient to the patient"
GLA

I cannot find cairn energy on iii. I cannot open/close a trade. Does anyone else have the same problem?

In my opinion this makes no difference as Cairn has now a legal leverage to pursue the funds. The best India can do is to use delay tactics but the inevitable will happen.

Lets hope India pays up or risk deterring potential investors. I believe India will come to its senses eventually as India/UK have 100billion+ bilateral investments agreement in the pipeline.

Evidently some brokers are also optimistic:

RBC RAISES CAIRN ENERGY PRICE TARGET TO 300 (150) PENCE - 'OUTPERFORM'

BARCLAYS RAISES CAIRN ENERGY PRICE TARGET TO 315 (235) PENCE - 'OVERWEIGHT'

It seems interesting that ODEY have been reducing his short position since November. Definitely watching this now. Let's see if the bullish trend holds in coming days

Why is the SP being held back, POO is nearly $2 higher than last week and the SP continue to be trending down. I think many have taken long position and MM not keen to pay out profits. Only thing that will get this moving is a catalyst. A tree shake before the next leg up judging from last few days.

Thats a positive indication of improved liquidity. Looking good...

In my opinion this is a market over-reaction. The shares sold in the open market constitutes 12% of the shares in issue. The shares only changed hands and hence share dilution has not taken place. Yes, there is more shares now in free float unless a major II grabbed these shares. It would have been better for investors if more clarity was provided on this point. However, I do believe the recent drop is over-stretched and driven by fear. If there was any operational issues it would have been imperative for HOC to update the market prior to sale. I do agree that it seems more plausible that he needs to raise capital to meet other pressing matters.

If price of oil continues its current bullish run and establish support, this among many other important factors will support gold in the long term. Potentially higher POO and all the funds pumped into global economies to aid recovery this year will have inflationary effects in the long term. In my opinion POG continues to look bullish and I anticipate a recovery at some point when this Biden inspired euphoria dissipates and when reality sinks in. I just hope we wont have another president that can shift indices with a tweet.