Essar Group has got a USD 330 million loan from Russia’s VTB Bank to fund its Rs 2,081 crore plan for delisting Essar Oil from local bourses.
Essar is seeking to buy non-promoter shareholding of 28.54 per cent at Rs 146.05 per share to give billionaire brothers, Shashikant and Ravikant Ruia, greater flexibility and less regulatory scrutiny.
Essar has secured from VTB a USD 330 million loan, the equivalent amount it has to pay to get the nation’s second-biggest non-state oil refiner delisted.
The loan is part of the larger understanding the billionaires had reached with Russia in July this year wherein they agreed to sell 49 per cent stake in Essar Oil to state oil producer Rosneft.
Alongside, a separate deal was inked wherein Rosneft is to supply 10 million tonnes of oil a year, or half of Essar Oil’s Vadinar refinery capacity, over 10 years.
Sources also said a final share sale agreement is stuck over valuations but in the interim debt-laden group has got enough funds to get Essar Oil delisted.
Shares will be bought in a reverse book building, beginning December 15 and ending on December 21, according to a company delisting notice.
In pursuance of the approval given by the Securities and Exchange Board of India (Sebi), Essar Oil will make good to the minority shareholders, the difference between the delisting offer price and the rate at which it sells 49 per cent stake to Rosneft.
“The proposed delisting of equity shares from the stock exchanges is to achieve complete operational or financial flexibility in furtherance of the company’s business or financial needs and enable promoter shareholders and the promoter to pursue strategic opportunities in respect of its investments,” the offer notice said.
The group has recently delisted Essar Energy from the London Stock Exchange and also made its locally listed ports business private.