Essar Group on Wednesday announced the completion of delisting of Essar Oil, the group’s largest listed entity in India, from the bourses. The promoter, Oil Bidco (Mauritius) Ltd completed the acquisition of 10.1 crore shares from public shareholders, which is much more than the required 9.26 crore for delisting. The public shareholders held 14.25 crore shares in the company.
While over 70 per cent of the publicly held shares have already been tendered, the company said that the remaining shareholders, who have not tendered their shares in the delisting offer can offer it at the delisting price for one year from the date of delisting.
The promoters offered a price of Rs 262.8 apiece (80 per cent premium to the floor price of Rs 146.05) for the buyback, it would take the total payout for acquiring public shares at Rs 3,745 crore, making it the biggest delisting payout in India. Also, with a market cap of Rs 38,100 crore at the delisting price of Rs 262.8, this is the biggest privatisation in the country.
The biggest payout made for a delisting till date was by Essar Ports Limited, where the promoters made a payout of Rs 1,430 crore earlier this year to get it delisted. While these two have been the biggest delisting payouts in India, another Essar group firm — India Securities occupies the fourth spot in privatisation transactions as the promoters paid Rs 1,359 crore for its delisting in 2012.
The group has privatised four entities – Essar Oil, Essar Ports, Essar Steel and India Securities — and has made a payout of over Rs 7,200 crore to investors.
In a statement issued on Wednesday, the company said that shareholders tendered their shares between December 15, 2015 and December 21, 2015.
Essar Oil had initiated the delisting process in June 2014 when the company’s board approved the delisting proposal to acquire 13.7 crore shares, constituting 27.5 per cent stake, from public shareholders. However, the procedure was kept on hold in December 2014 as the company had to align with the new delisting guidelines announced by Sebi in December 2014.
As per the revised delisting regulations, participation of 25 per cent of public shareholders in reverse book building (RBB) is sufficient for voluntary delisting against a requirement of 50 per cent public shareholding earlier. The market regulator also reduced the timeline for delisting to a minimum 76 days from 137 days earlier, and allowed the use of stock exchanges for delisting of shares.
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 of 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.