Cairn in share split

3rd Dec 2009 07:38

Oil company Cairn Energy is to tackle its unwieldy share price by means of a 10 for 1 sub-division of its share capital.The effect of the move will be to multiply the number of shares held by each shareholder by 10 while, at the same time, reducing the value of each share by one-tenth.Shareholders will not be required to pay for the new shares that will replace their existing holdings.The company said the sub-division is aimed at improving the liquidity and marketability of Cairn shares, which currently trade at more than £30 each.The company is also planning to revamp some of its share incentive awards for senior personnel following the company’s decision not to demerge Capricorn, its wholly owned exploration subsidiary.The company said that with Capricorn unlikely to become a separately quoted company, certain targets in the incentive schemes relating to share price performance of Capricorn no longer make sense. The company intends, instead, to use an implied valuation of Capricorn of around $953m, derived from the recently announced conditional "farm-in" to Capricorn’s Greenland assets by PETRONAS International.Both the sub-division and the changes to the incentive programmes will need to be ratified at an extraordinary general meeting to be held in Edinburgh on 21 December.