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Essar Oil minority shareholders to earn more on shares tendered during 2015 delisting

LiveMint logoLiveMint 22-08-2017 Shakti Patra

Mumbai: Essar Oil Ltd’s minority shareholders, who had tendered their shares in the company’s delisting offer in 2015, will earn about Rs107.3 per share, following the acquisition of 98.26% of its equity by Rosneft PJSC, Trafigura Pte Ltd and UCP Investment Group, a Mint analysis reveals.

The analysis is based on a statement of the chairman of the company’s new board, Tony Fountain, who said on Monday that the $12.9 billion deal will see about $5 billion of debt on its balance sheet, thereby essentially valuing the company’s equity at $7.9 billion or Rs52,756.2 crore (at a conversion price of Rs66.78 for a US dollar). With a total of 145.06 crore shares outstanding as of financial year 2015-16, this translates into a per share price of about Rs370.1 (Rs52,786.2 crore divided by 98.26% of 145.06 crore shares).

With the delisting having been done at Rs262.8 per share and capital markets regulator Securities and Exchanges Board of India (Sebi) having asked the promoters of the company to “pay the difference between the transaction price with Rosneft and the final delisting price to those shareholders whose shares were accepted in terms of the delisting regulations, if the former is higher”, minority shareholders who had tendered their shares then are set to earn the difference between the two—Rs107.3 per share.

The Sebi order, dated 6 November 2015, followed several complaints by minority shareholders of the company, essentially alleging that the promoters of the company were trying to delist it having already sealed a deal to sell their stake in it to another investor at a higher price.

“Those shareholders who tendered their shares in the open offer will be paid back according to the margin from the deal as per Sebi’s buyback regulations,” Essar Group’s founder Shashi Ruia told PTI.

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