Capital market regulator Securities and Exchange Board of India (Sebi) on Friday granted some relaxation from delisting norms to Essar Energy Holdings Ltd on the imminent takeover of its subsidiary Essar Oil Ltd by Russian oil company OJSC Rosneft Oil Co.
On 15 July, Essar Energy had sought exemption on time lines for Essar Oil for the latter’s proposed delisting from exchanges. Earlier, Essar Oil had announced that it will sell a 49% stake to Rosneft.
Sebi said it received complaints from some shareholders, alleging that Essar Oil did not disclose the pricing of its deal with Rosneft and that it would be unfair if the Rosneft deal is agreed to at a share price that is higher than the floor price to be set for public shareholders for Essar Oil’s delisting.
On Friday, Sebi asked the promoter to expeditiously make the public announcement on delisting and specifically mention therein that the floor price will be as per delisting norms.
Sebi said that keeping the minority shareholders’ interests in mind, the company will be allowed to make the final application for delisting within two months of Friday’s order.
Delisting norms require a listed company to make the final application for delisting to the stock exchanges within a year of the passing of the special resolution by shareholders. Accordingly, Sebi said the company was supposed to file the same by 5 August, considering that the shareholders approved the delisting proposal on 4 August 2014.
However, the company in a letter to Sebi, said it could not file the final application as the in-principle approval was obtained on 15 July and the promoter required additional time to complete the financial and operational arrangements.
On 1 September, the promoters requested Sebi to allow the company two months from the date of approval to file the final delisting application with the stock exchanges, and to allow the company five days from the date of public announcement for dispatching the letters of offer to public shareholders.
Sebi agreed to these relaxations.
But it did so on the condition that the promoters of Essar Oil will pay the difference between the transaction price with Rosneft and the final delisting price to shareholders whose shares are accepted in the delisting, if the former is higher.
In case the deal with Rosneft is inked after the delisting, the promoters of Essar Oil will be required to pay the difference to shareholders within two months, Sebi ordered.