CAIRN Energy is set to give up the name under which it achieved renown after cutting a deal to end a long-running tax dispute in India.
The Edinburgh-based oil and gas company announced yesterday that it has agreed to accept a tax refund worth around $1 billion (£0.7bn) from the Government of India.
The agreement is expected to bring an end to a dispute which started in 2014 and resulted in the government seizing assets from Cairn.
The group had expected to receive $1.7billion, including interest and costs, after an international tribunal found in its favour in December.
It used measures such as the freezing of properties in Paris owned by the government in order to try to enforce the tribunal award.
However, Cairn said yesterday that it had decided to terminate the enforcement actions concerned after the government agreed to refund $1bn tax which it had collected.
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Cairn first provided details of the proposed agreement in September, when it said it planned to pay up to $700m of the expected proceeds to investors.
The agreement will allow the company to draw a line under an affair which chief executive Simon Thomson noted then had entailed “multiple years of cost and time spent”.
The dispute concerns events leading up to the flotation of Cairn’s former subsidiary in India in 2007 and a related initial public offering (IPO).
The Indian business owns big finds made by the group under the leadership of Sir Bill Gammell, who founded Cairn Energy in 1980.
In an announcement made after the stock market closed yesterday, the group said it plans to change its company name to Capricorn Energy PLC, effective from December 13.
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The group said: ”This follows an agreement at the time of the Cairn India IPO that the name would ultimately be changed.
“Given the recent legislative change in India and our participation in the related tax refund process, we are now putting in place the planned name change.”
Cairn did not provide details of the agreement referred to.
It noted: “The majority of Cairn’s subsidiaries have been known as Capricorn for some time.
“It is an established and respected name across our global operations, maintaining stakeholder confidence in our long-standing reputation for responsibility, relationships and respect.”
The group said yesterday that it expects to pay a special dividend by early 2022. This is expected to be worth $500m in total.
It sold a controlling stake in Cairn India to Vedanta Resources for $5.5bn in 2010. Mr Thomson succeeded Sir Bill as chief executive the following year.
Cairn has interests in a range of countries, including the UK, Egypt and Mexico.
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