Essar Energy Disburses INR 891 Crore (Inr 76.41/share) To Erstwhile Public Shareholders Of Essar Oil As Additional Payout

Essar Energy Disburses INR 891 Crore (Inr 76.41/share) To Erstwhile Public Shareholders Of Essar Oil As Additional Payout

Pointers:

  • Erstwhile public shareholders, who tendered EOL shares in the delisting cum exit offer of 2015, received an additional amount of INR 76.41 for every share tendered
  • This payout over and above the price of INR 262.80 per share paid to shareholders at the time of delisting. Accordingly, the total payout to public shareholders has increased INR 3,064 crores (at the time of delisting) to INR 3,955 crores.
  • The additional payout has been calculated on the basis of the equity price per share of INR 338.28 received by Essar Energy upon completion of the Essar Oil deal.
  • This is the first instance where public shareholders are being rewarded even after tendering their shares in a delisting.
  • The additional payout is in furtherance of closure of INR 86,000 crore deal of Essar Oil sale transaction.

Tushar Srivastava

The erstwhile Promoters of Essar Oil Ltd (EOL), Essar Energy Holdings Limited (EEHL) and Oil Bidco (Mauritius) Limited (OBML), both companies incorporated and managed under the laws of Mauritius, have disbursed on 11 December 2017 INR 891 crores to erstwhile public shareholders of EOL translating into a price of INR 76.41 per share.

The announcement comes after the closure of the INR 86,000 crore deal involving the sale of EOL by EEHL and OBML to Rosneft and a consortium led by Trafigura and UCP.

All shareholders who successfully tendered their EOL shares in the delisting offer cum exit offer made by the erstwhile Promoters in December 2015 are the beneficiaries of this additional payout of INR 76.41 per share calculated based on the closing price including the interest at 10% per annum for the extended period beyond the prescribed due-date.

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This translates to an additional payment of INR 891 crores in addition to the INR 3,064 crores that was paid to the erstwhile public shareholders following EOL’s delisting in 2015.

EOL was valued at INR 2,000 crore around the time of its listing in 1995, and as per the transaction has now been valued at about INR 50,400 crore, a growth of 2,420%. This value creation has been made possible through continued strategic investments and growth of the business.

Mr Dhanpat Nahata, Director of EEHL said, “Essar Energy has successfully completed the payment to the erstwhile public shareholders of Essar Oil. This exceptional payout is unparalleled in the history of capital markets and aligns with our thinking of rewarding shareholders who had invested and believed in us. We feel proud to be a part of this transaction that has created so many worthy precedents.”

Of the 14.25 crores shares held by public shareholders, OBML acquired 11.66 crores shares through the delisting cum exit offer (including during the one year exit window) made to shareholders, as against the requirement of 9.26 crores shares for delisting. The shareholders tendered their shares through the reverse book building window made available to them under the delisting regulations. While the floor price for the delisting was set at INR 146.05 per share in accordance with a SEBI-mandated formula, OBML agreed to pay INR 262.80 per share, which was a premium of 80% over the SEBI mandated formula. Now, with the additional payout, the total price paid represents a premium of about 132%.

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Essar Global Fund Limited (EGFL) is a global investor, owning a portfolio of companies that control and operate a number of world-class assets, focused on India, and diversified across the core sectors of Oil & Gas, Steel, Power, Ports, Projects, Shipping, Mining, BPO and other services. The Fund’s portfolio companies have aggregate revenues of about US$15 billion. The Fund is managed by its investment manager, Essar Capital Limited.

Essar Energy Holdings Limited, Mauritius, an indirect subsidiary of EGFL, is a global investor, owning world-class oil & gas assets which includes Stanlow refinery in the UK and oil and gas blocks in India, Indonesia, Nigeria, Madagascar and Vietnam.

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