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Thursday, December 17, 2020
Cairn announced that all Government and third-party approvals required under the Sale and Purchase Agreement in relation to the sale of all of its interests in Senegal to Woodside have been received and completion is expected to take place prior to the end of the year. Under the terms of the agreement, cash received by Cairn at completion is expected to be approximately $525 million, comprising the $300 million acquisition consideration and a US$225 million reimbursement of expenditure incurred on the sale assets since 1 January 2020.
A further payment of up to $100 million will be payable to Cairn if certain conditions are met relating to the date of first production from the Sangomar development and the prevailing oil price at that time.
Following completion of this sale, Cairn will pay a special dividend of 32 pence per eligible ordinary share amounting to a return of approximately $250 million or £188 million to shareholders and complete a consolidation of Cairn’s ordinary share capital. The special dividend is expected to be paid on 25 January 2021 to those on the register on 8 January 2021.
The Share Consolidation will reduce the number of Cairn’s issued ordinary shares by an amount that reflects the value of the Return of Cash to Shareholders relative to the market capitalization of Cairn prior to the Return of Cash. The aim of this is to ensure, so far as possible, the market price of an ordinary share remains approximately the same before and after the Proposed Return of Cash and to maintain comparability of historical and future per share data. The Share Consolidation will reduce the number of ordinary shares in Cairn which shareholders own, but not the proportion (subject to allowance for fractional entitlements).
Cairn is today posting a circular to Shareholders in connection with the Return of Cash. The Circular contains a notice convening a General Meeting of Cairn Shareholders where Shareholders will be asked to approve the Return of Cash and Share Consolidation. The General Meeting will be held at Cairn’s head office at 50 Lothian Road, Edinburgh EH3 9BY at 9.00 a.m. on 8 January 2021.
As a result of the current COVID-19 pandemic and the legislative measures and associated guidance introduced by the Scottish and UK governments in response, for the safety of our Shareholders, our employees, our advisers and the general public, the General Meeting will be held as a closed meeting. Attendance by Shareholders at the General Meeting in person will not be possible and Shareholders or their appointed proxies (other than the chair of the General Meeting) will not be permitted entry to the General Meeting. Further information on the arrangements for the General Meeting is set out in Part I of the Circular.
The Circular will shortly be available for viewing on the investors section of Cairn’s website at www.cairnenergy.com/investors. A copy of the Circular will also be submitted to the National Storage Mechanism and will shortly be available for inspection on its website at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
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