Essar Oil Ltd, the oil and gas unit of the Ruias-controlled Essar Group and a subsidiary of London-based Essar Energy Holdings Ltd (EEHL), is planning to delist the company from local stock exchanges.
In a notice issued to the Bombay Stock Exchange (BSE), the Mumbai-based company said a board meeting slated for June 23 will seek approval to consider delisting of its shares from the two stock exchanges in India – the National Stock Exchange of India Ltd and BSE.
Essar Oil said the company had received a letter dated June 20 from its parent informing it of a proposal to voluntarily delist the equity shares of the company listed on these exchanges. The company currently has 137,123,373 equity shares held by public shareholders which constitute 27.53% of the total shareholding of the company.
EEHL, incorporated under the Mauritius laws, holds 71.22% of the issued equity share and a promoter of Essar Oil. Other promoters holding stakes in Essar Oil are Imperial Consultants & Securities Pvt Ltd (1.25%), Essar Power Hazira Holdings (100 shares) and the depository (Bank of New York Mellon) which holds 951,463,854 shares against which global depository shares have been issued to promoters.
The proposal to delist was part of the strategy of Essar Energy Plc to take the entire energy business private for financial flexibility, a statement from the company said.
The stock price on the NSE has appreciated by 40% since last month. From Rs 77.55 on May 20, the stock price closed on Friday at Rs 108.70. On the BSE as well as the NSE, the stock on Friday ended at Rs 108.40 or up 1.64% from the previous close and Rs 108.70 (1.87%) respectively.
EEHL proposes to acquire the public shareholders' shares at a price through the reverse book-building mechanism.
The statement further said that shareholders have been given an opportunity to exit the stock at a price in accordance with the Securities and Exchange Board of India's delisting norms.
The price payable by EEHL for public shareholding will be the discovered price (through reverse book-building) at which the maximum number of shares are tendered by the public shareholders.