Cairn Energy has entered into certain undertakings with Government of India, which would allow for the refund of taxes under a long-running billion dollar dispute, sending the British company’s shares nearly 3 per cent higher on Wednesday.
The news comes after the oil and gas producer said in September it was considering undertakings with the Indian government after changes were made to a retrospective tax law at the heart of the row.
London-listed Cairn said it would start filing the necessary documents and work with New Delhi to expedite the refund of roughly 79 billion rupees ($1.06 billion).”Cairn will commence the filing of the necessary documentation .. intimating the withdrawal, termination and/or discontinuance of various enforcement actions,” the company said in a statement.
Cairn added it expects to pay by early 2022 the special dividend announced in September.
The dividend and a share buyback were contingent on the settlement of the dispute. In August, India proposed scrapping the 2012 retrospective tax law and said it would refund companies including Cairn and Vodafone.