India: Essar Oil gets extension from market regulator on proposed delisting

Image from Essar website

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.

Also Read: Essar Ports fixes $1.4 per share as floor price for delisting

This article was first published on Livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.