Essar Oil has announced completion of its delisiting from the stock exchanges on Wednesday after Oil Bidco, its promoter, agreed to pay Rs 3,745 crore to public shareholders, the largest delisiting offer in India’s corporate history.
The promoter has offered a price of Rs 262.8 apiece for the buyback – 80% premium to the floor price of Rs 146.05 per share.
Out of the 14.25 crore shares held by public shareholders, the promoter has managed to acquire 10.1 crore shares.
Shareholders who have not tendered their shares in the delisting offer can offer them to the promoters at the delisting price for a period of one year from the date of delisting, an official statement by the company said.
JM Financial was the sole manager to the Essar Oil’s delisting offer.
Prior to this, the delisting of Essar Port was the largest where promoters paid out R1,430 crore to public shareholders to make the company a private entity.
Essar Oil had initiated the delisiting process in June 2014 when its board approved the proposal to acquire 13.7 crore shares, constituting 27.5% stake, from public shareholders. However, the procedure was kept on hold in December 2014 as the company had to align with the new delisiting guidelines announced by markets regulator Sebi.
As per the revised delisiting regulations, participation of 25% of public shareholders in reverse book building (RBB) is sufficient for voluntary delisiting against the requirement of 50% public shareholding earlier. Sebi also reduced the time line for delisting to a minimum 76 days from 137 days earlier, and allowed the use of stock exchanges for delisting of shares.
In addition, the revised norms also allow the use of Takeover Code to delist the shares on conditions the company disclose its intent to remain listed or not at the time announcing the mandatory open offer under the Takeover Code, among other changes.
This is the sixth delisting offer under the revised rules . So far, Srinivasa Hatcheries, Fulford India, Gujarat Metal Cast, Panasonic Appliances and The Anup Engineering have successfully conducted their reverse book building.