Cairn Energy shareholders to get £2.2bn pay-out

Workers in India at a pipeline The sale has taken more than a year to get final approval from the Indian government

Related Stories

Edinburgh-based oil explorer Cairn Energy is to distribute more than £2.2bn to its shareholders.

The cash pay-out follows the sale of a controlling stake in the company's Indian subsidiary for about £3.5bn.

That sale in two tranches - to metals company Vedanta - was announced in August last year but it has taken until this week to receive final clearance from the Indian government.

It leaves Cairn Energy holding 22% of Cairn India shares.

The company intends to retain its stake.

The pay-out is being denominated in US dollars, as with most oil companies. The first tranche of sale, for 10% of the Cairn India subsidiary, was for $1.4bn earlier this year.

The second tranche of the company includes 30% of the shares, and hands Vedanta the controlling stake. It has raised $4.1bn for the parent company in Scotland.

The group's biggest shareholders are investment funds. Blackrock had nearly 10% and HSBC Global Asset Management had nearly 9% on 11 November this year.

Edinburgh-based Walter Scott and Partners and Scottish Widows each held more than 4% of the shareholding.

The pay-out is being designed to give shareholders a choice as to when, and in what form, the cash is received.

'Landmark' deal

Cairn Energy chief executive Simon Thomson commented: "This transaction represents a major milestone in Cairn's history. It crystallises the very significant value creation that we have delivered from our Indian business.

"Our remaining 22% shareholding in Cairn India, retained cash and balance sheet strength provide financial flexibility and an excellent platform for future growth opportunities."

Anil Agarwal, chairman of Vedanta - which operates mainly in India with a listing on the London Stock Exchange - said: "The acquisition is a landmark event for the global natural resources sector and for India, which is looking at sustainable energy sources to fuel its growing economy.

"We firmly believe that Cairn India has the potential to double its current capacity and we will work together to achieve it."

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Scotland business stories



  • A very clever little girlBrain gain

    Why are people getting better at intelligence tests?

  • BeefaloBeefalo hunt

    The hybrid animal causing havoc in the Grand Canyon

  • A British Rail signBringing back BR

    Would it be realistic to renationalise the railways?

  • Banksy image of girl letting go of heart-shaped balloonFrom the heart

    Fergal Keane on the relationship between love and politics

  • Don Roberto Placa Quiet Don

    The world's worst interview - with one of the loneliest men on Earth

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.