The overwhelming majority of Cairn Energy shareholders have opted to hold on to their Cairn B shares after pocketing the juicy dividend offered as the oil firm passes on some of the proceeds from its sale of its Cairn India stake.
Cairn shareholders had three options: the single B share dividend of £1.60; an initial purchase offer of £1.60 for each of their B shares or a future purchase offer of their B shares.
The dividend option was chosen in respect of 909.5m B shares, representing 64.6% of the B shares in issue. The relevant B shares have been automatically reclassified as deferred shares having negligible value and carrying extremely limited rights.
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Option two - the initial purchase offer - was chosen in respect of 34.7% of the B shares in issue with the remainder opting for option three.
The choice between the options came down to whether holders wanted to (potentially) pay income tax on their dividends on capital gains tax on their share sales.
Cairn energy opted to return a large chunk of cash to shareholders after selling a 40% shareholding in Cairn India to Vedanta Resources. Not all of the Cairn India money has been returned to shareholders; a good deal of it has been sunk into the sea off the coast of Greenland where the company has been drilling for oil, thus far with little success.
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