Essar Oil to raise $300 mn through FCCB issue

Essar Oil, a part of Ruias-promoted business conglomerate Essar Group, today said it will raise $300 million from its promoters to fund the company's ambitious expansion projects.

"The company (Essar Oil) has decided to raise up to $300 million by issue of Foreign Currency Convertible Bonds (FCCBs) in one or more tranches on a preferential offer basis to promoter company, Essar Energy Holdings," it said in a statement to the Bombay Stock Exchange (BSE).

Essar Oil shareholders had on April 22 approved raising $1.7 billion through the sale of securities to promoters.

The funds were to be raised through the issue of ADRs/GDRs/FCCBs aggregating to $1.7 billion to the promoters on a preferential offer basis. The $300 million FCCB issue is part of that fund raising.

Previously, the Essar Oil promoters had infused a similar amount ($300 million) in the company.

Essar is expanding its Vadinar refinery in Gujarat. The unit is being expanded from 300,000 barrels per day to 375,000 bpd, with the complexity being increased from 6.1 to 11.8.

The expansion will cost $1.7 billion.