Cairn to assess impairments relating to India in August

Tags: Cairn, Industry
London-listed oil and gas explorer Cairn Energy will assess impairments on the value of its shareholding in Cairn India Ltd by mid-August, when the company reports the next set of results, it said on Thursday.

India's tax authorities contacted Cairn Energy in January to discuss income tax assessments dating back about seven years, making it the latest foreign firm to be involved in the tax crackdown the country has launched to cut its budget deficit.

Other foreign multinational companies to be targeted include Anglo-Dutch oil major Shell, South Korea's LG Electronics and France's Capgemini.

In March, Cairn Energy called a halt to a $300 million share buyback programme until a review of its Indian income tax was resolved. It said the outcome would shape the company's way forward beyond 2014.

"The Indian income tax department has cited legislation introduced in 2012, with retrospective effect, as the reason for these current enquiries," Cairn said on Thursday.

"While these are being dealt with, Cairn has been denied access to the value of its shareholding in Cairn India Ltd (CIL), either through disposal or future dividend income, which will be assessed for impairment at the next reporting date."

It said that while interactions were ongoing with theIndian tax authorities, Cairn was unable to sell 10 percent of residual shareholding in Cairn India valued at around $1.1 billion as of the end of 2013.

Cairn said it would pursue the tax discussion with the new Indian government to be formed after the election in May.

The company also said that as of the end of March its net cash balance stood at $1.2 billion.

Cairn said French bank BNP Paribas would underwrite a 7-year, $575 million loan to fund development of the Catcher and Kraken fields in the North Sea.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Sebi’s latest ban on 260 entities plugs a major loophole for stock manipulation

    Last week, the capital market regulator, Securities and Exchange Board of India (Sebi) banned 260 entities from dealing in the securities market for m

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Taslima Nasreen

Religious conversion as fundamental right

Tricks and treats, coercion, threats, manhandling and extermination are the ...

Purnendu Ghosh

Does speed liberate or enslave humans?

Speed is the reflection of modernity and modernisation. Speed is ...

Shona Adhikari

Why Indian art auctions are here to stay

With Christie’s second India sale just over in Mumbai, we ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture