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Britain's Cairn Energy cements end of India tax dispute with undertakings

Britain's Cairn Energy cements end of India tax dispute with undertakings
Britain's Cairn Energy cements end of India tax dispute with undertakings   -   Copyright  Thomson Reuters 2021
By Reuters

-Cairn Energy has entered into certain undertakings with India which would allow for the refund of taxes under a long-running billion dollar dispute with the country, sending the British company’s shares nearly 3% 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.

($1 = 74.4890 Indian rupees)