Britain's Cairn Energy cements end of India tax dispute with undertakings

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FILE PHOTO: An employee at Cairn India, a unit of UK-based Cairn Energy Plc, works at a storage facility for crude oil at Mangala oil field at Barmer in the desert Indian state of Rajasthan on August 29, 2009. REUTERS/Parth Sanyal

(Reuters) -Cairn Energy has entered into certain undertakings with India which would allow for the refund of taxes under a long-running billion dollar dispute with the country, sending the British company's shares nearly 3% higher on Wednesday.

The news comes after the oil and gas producer said in September it was considering undertakings with the Indian government after changes were made to a retrospective tax law at the heart of the row.

London-listed Cairn said it would start filing the necessary documents and work with New Delhi to expedite the refund of roughly 79 billion rupees ($1.06 billion).

"Cairn will commence the filing of the necessary documentation ... intimating the withdrawal, termination and/or discontinuance of various enforcement actions," the company said in a statement.

Cairn added it expects to pay by early 2022 the special dividend announced in September. The dividend and a share buyback were contingent on the settlement of the dispute.

In August, India proposed scrapping the 2012 retrospective tax law and said it would refund companies including Cairn and Vodafone.

($1 = 74.4890 Indian rupees)

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Krishna Chandra Eluri)

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