Cairn has 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 US$525 million, comprising the US$300m 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 US$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.
Proposed Return of Cash to Shareholders
Following completion of this sale, Cairn will pay a special dividend of 32 pence per eligible ordinary share amounting to a return of approximately US$250m or £188m 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 capitalisation 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).