Ashurst is advising Morgan Stanley in relation to Cairn Energy’s proposed return of approximately US$3.5 billion to shareholders following the completion of the disposal of Cairn’s 40 per cent shareholding in Cairn India to Vedanta Resources plc.

Cairn is carrying out a ‘B’ share scheme which will allow UK tax resident shareholders either to receive their payment as capital or income (in certain territories it will automatically be received as income). The return of capital is conditional upon shareholder approval at a general meeting of Cairn to be held on 30 January 2012. Morgan Stanley is acting as broker to Cairn and is expected to make an offer to Cairn shareholders to purchase any ‘B’ shares validly elected by them under the scheme and to sell such shares back to the company for cancellation. 

The Ashurst team was corporate partner Nick Bryans, assisted by associate James Fletcher. Nick, assisted by James, has also advised J. P. Morgan Cazenove on the £1.05 billion return of capital by Wood Group earlier this year and the £670 million return of capital by Misys in November 2010.