Essar Oil closes India’s largest corporate delisting


The Shashi Ruia-led Essar Oil on Wednesday announced completion of the company’s delisting from stock exchanges after paying out the largest amount in India’s corporate history – Rs.3,745 crore – to shareholders.

“Oil Bidco (Mauritius) Ltd, promoter of Essar Oil (EOL), is pleased to announce the successful completion of EOL’s delisting offer process, which has emerged as the largest privatisation bid in the history of corporate India, valuing EOL at Rs.38,000 crore of market capitalisation,” the company said in a statement.

“The Rs.3,745 crore that will be paid to shareholders makes this the largest payout to privatise a publicly-listed company in India,” the statement said.

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, it added.

While the floor price for the delisting was set at Rs.146.05 per share, Oil Bidco (Mauritius) has agreed to pay Rs 262.80 per share, which is a premium of 80 percent, Essar Oil said.

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.

“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,” said company founder and chairman Ruia.

Essar Oil’s market capitalisation, which stood at just Rs.2,000 crore in 1995, is currently over Rs.38,000 crore at the delisting price. This has been made possible through strategic investments in the business since commencement of commercial operations at the Vadinar refinery, Gujarat in May 2008, especially in expanding and upgrading refining capacity from 9 million tonnes to 20 million tonnes, the statement said.

Essar Group, through privatisation of its corporate entities over the years – Essar Oil, Essar Ports, Essar Steel and India Securities – has made substantial payouts of over Rs.7,200 crore to investors.

Essar businesses have revenues of over $35 billion and employ more than 60,000 people, it said.

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