Member Info for Tenapenny

I have slightly lost my mind with Cairn. I first bought back in 2014 and other than a quick trade in first half 2020 have been accumulating on the dips on holding for what feels like a very long time. I thought I was all done in terms of what I could/should afford but the dip to 130p in July this year seemed too good to ignore so I filled my boots then too. I will retire a year or two earlier than planned if this peaks over 2.50 in the next month or two. Better still, it peaks near 3.

I agree with L3, Cairn should continue the Air india case, which I thought was due to announce a verdict in September so anytime now. If GoI go back on their word regarding any settlement reached then restarting the case just adds more delay, possibly 6-12 months. A positive outcome from the Air india case would put Cairn in an incredibly strong position and it would be very useful to have it settled, especially given how close it is to being announced.

Would it not need agreement of the major shareholders though, in which case the bid would hopefully need to be towards £2b to be accepted? The benefit for India would be saving face, even if they didn't particularly save money. As a small holder I would be happy if they bid around £2b in total (2.5 times the current share price).

https://dailybusinessgroup.co.uk/2021/04/cairn-energy-offers-to-invest-in-india-to-settle-tax-battle/

"India is expecting a stay on the award from a lower Dutch court anytime now. Based on that, it will seek a stay on the implementation of the award in other jurisdictions such as the UK, Canada, the US, and France, which will protect India from its commercial assets like aircraft and ships getting seized."

This seems too important and complex for a lower court to set a precedent and make a decision which prevents asset seizing.

https://www.business-standard.com/article/companies/india-appeals-against-cairn-arbitration-order-seek-stay-on-1-2-bn-award-121032301272_1.html

Perhaps I am being naive but I am hopeful that with Blackrock and Massachusetts FSC holding roughly 20% in total between them, we will move swiftly to seizing assets if GOI make an unfavourable decision before the end of March.

This is ominous news for shareholders from the Indian Government. I hope Cairn start seizing assets as per the binding tribunal agreement outcome the Indian Government signed up to.

It is a lot to have invested in one company. Some RBS employees lost a lot of money when it went to ruin and they lost a career's worth of bonus shares.

One thing for you to consider is whether to use this as an opportunity to diversify 25% of your holdings into something else. you could open up a stocks and shares ISA with your bank and fund it with your special dividend.

Travel and oil shares are at a long term low at the moment for example and depending on your appetite for risk might make you a lot more money than Tesco over the next few years.

You need to consider it thoroughly!

https://www.bloomberg.com/opinion/articles/2021-01-27/india-s-retro-tax-on-business-was-bad-but-stiffing-cairn-energy-is-all-on-modi

Bloomberg reckon India should pay.

I just put my whole special dividend in at 171p. I am thinking 171p post-consolidation is equivalent to 144p pre-consolidation. So I have the same monetary value of holding as I had before the special dividend payout, but I now have an increased share of the company. However the company is in better shape with the favourable India award. It can't be this simple, am I missing something?

So normally you would expect the share price to go up by something around 32p on the RNS announcement and it to drop on payment of the special dividend? However by announcing the consolidation meaning the share price is to remain the same but with shareholders holding fewer shares (a lower capital amount), will shareholders end up with no net benefit as they get the 32p per share dividend but a reduction in their holding of the same amount? Things are worse if you pay tax on the dividend. So what is the benefit to shareholders of this whole exercise?