Essar Oil promoters complete successful delisting offer process

Essar Oil Limited on Wednesday said that its promoter, Oil Bidco (Mauritius) Limited, has successfully completed delisting offer process of the company at a market valuation of Rs 38,000 crore. With this offer process, the company’s delisting has emerged as the largest privatisation bid in the history of corporate India.

Of the 14.25 crore shares held by public shareholders, the promoters have acquired 10.1 crore shares through an offer made to shareholders, as against the requirement of 9.26 crore shares for delisting. The shareholders tendered their shares between December 15, 2015 and December 21, 2015, through the reverse book building window made available to them under the delisting regulations. While the floor price for the delisting was set at Rs 146.05 per share, Oil Bidco (Mauritius) Limited has agreed to pay Rs 262.80 per share—which is a premium of 80 per cent. The Rs 3,745 crore that will be paid to shareholders makes this the largest payout to privatise a publicly listed company in India, according to company’s release.

The shareholders who have not tendered their shares in the delisting offer can offer their shares to the Promoters at the delisting price for a period of one year from the date of delisting.

Shashi Ruia, Founder Chairman, Essar said, “We are happy that we have been able to reward our public and institutional shareholders for the faith they reposed in us over the years. I want to take this opportunity to thank investors, stock exchanges and regulators for their support in this journey.’’

The Essar Oil Limited stock has seen sustained and significant growth since its IPO in 1995. While the company’s market capitalisation stood at just Rs 2,000 crore in 1995, it is today over Rs 38,000 crore at the delisting price.

Over the years, Essar Group, through privatisation of its corporate entities Essar Oil Ltd, Essar Ports Ltd, Essar Steel Ltd and India Securities Ltd, has made a payout of over INR 7,200 crore to investors, thus providing substantial returns.

With this transaction, Essar ranks among one of the world’s largest privately-held conglomerates with large-scale, world-class operations acroreoss the globe, spanning Oil Refining and Marketing, Power, Steel, Ports, Shipping, EPC and BPO. Essar businesses have revenues of over USD 35 billion and employ more than 60,000 people.