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(Alliance News) - Cairn Energy PLC on Thursday said is plans to return USD250 million to shareholders, having now obtained all approvals needed for the sale of its Senegal interests to Australian firm Woodside Petroleum Ltd.
Edinburgh-headquartered FTSE-250 oil and gas explorer Cairn will receive around USD525 million from the Woodside sale, consisting of a USD300 million acquisition consideration plus a USD225 million reimbursement of expenditure on sale assets since the start of 2020.
With all government and third party approvals required under its sale and purchase agreement with Woodside now received, and with completion set to take place before the end of the year, Cairn announced plans to pay a special 32 pence per share dividend.
Cairn will return around USD250 million to shareholders and complete a consolidation of its ordinary share capital. The consolidation will shrink the number of Cairn shares in issue "by an amount that reflects the value of the return of cash to shareholders relative to the market capitalisation of Cairn prior to the return of cash."
The aim of this consolidation is to keep the market price per ordinary Cairn share the same before and after the return of cash to ensure historical and future share data are comparable. It will shrink the number of Cairn shares owned by shareholders but not the proportion.
The company will hold a general meeting to approve the return of cash and the share consolidation on January 8, 2021.
Shares in Cairn were up 1.6% at 170.10 pence in London on Thursday morning. Shares in Woodside Petroleum closed 3.0% higher at AUD23.56 in Sydney on Thursday.
By Anna Farley; annafarley@alliancenews.com
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