Essar Oil planning to delist from small stock exchanges

Our Corporate Bureau

Mumbai, Aug 24: ESSAR Oil is seeking to be delisted from the stock exchanges of Delhi, Madras, Ahmedabad, Vadodra and Calcutta. This decision was made by the board of Essar Oil on Thursday.

In a communique to the stock exchanges, the company has said that the shares and debentures in these regions will not suffer due to delisting since with the introduction of screen-based trading on the National Stock Exchange (NSE), trading can be done from all over the country. The company has said that the trading at these smaller stock exchanges has been rare and negligible and that the stock exchanges have increased listing fees which is not in proportion to the trading volumes. This is also being done to conserve resources, the company said. The delisting is subject to approval of the share and debenture holders.

Essar Oil is in the process of achieving financial closure for its 10.5 million tonne oil refinery project at Jamnagar. The lead financial institution (FI) ICICI has completed the re-appraisal of the project.Based on the study of the FIs the project cost has been revised to Rs 8000 crore.

The company has already received the sanction letter from ICICI and IDBI boards. The company is in the process of entering into a tripartite agreement with ABB Lummus and ICICI, which will meet the total fund required for the project and completion of the project within 18 months of financial closure.

Under the agreement, the equity portion of the means of finance is fully tied up with financial assistance from ABB Lummus, and equity participation by strategic investors. The company is also in the process of divestment of some of its existing assets. In line with the requirements of the strategic investors for the refinery project and advise of consultants, the company has separated other division of the from the refinery. Essar Oil has already spent Rs 5,564 crore on the project.