Nayara Energy to make a buyback offer to its minority shareholders

Company board decides on buyback at Rs 731 per share

Nayara Energy, which operates India’s second-largest single-site refinery in Gujarat’s Vadinar, has decided to make a buy-back offer to its minority shareholders, with an intent to give them an exit opportunity.

 

The private refiner, which is backed by Russian oil major Rosneft, on Thursday said that its board of directors has decided to offer a buy-back for 2,59,08,262 shares at ₹731 apiece totalling about ₹19 billion.

 

These shares were once listed on the BSE and NSE as those of Essar Oil. But were voluntarily delisted from both the stock exchanges in February, 2016, by erstwhile promoters Essar Group at ₹262.80 per unit.

 

In 2017, Ruia-owned Essar Oil completed the sale of its India assets to a Rosneft-led consortium in a $12.9 billion deal. The assets included the Vadinar refinery, port and related facilities, including retail outlets.

 

While the erstwhile promoters had acquired equity shares from non-promoter public shareholders during the delisting process, over 2 lakh retail shareholders, roughly two per cent of the total shareholding then, did not participate in the exercise. These two lakh shareholders continue to hold shares in what is now called Nayara Energy.

 

“Since the equity shares of the company are not traded on any of the stock exchanges, the minority shareholders are not able to liquidate or monetise their shareholding. Minority shareholders have been frequently approaching the company requesting an exit opportunity be provided to them,” Nayara said in its statement.

 

The offer price of ₹731 per share, Nayara said, was based on a valuation exercise conducted by an independent registered valuer. The company added it would shortly be finalising the schedule for the buyback program and issuing the Letter of Offer to its minority shareholders.

 

Nayara Energy operates the Vadinar refinery, which has a capacity of 20 MTPA and over 6,500 retail outlets.

 

“We have adopted a phase wise asset development strategy and have recently forayed into the petrochemicals sector with a 450 KTPA Polypropylene plant which is a significant step in our crude to chemicals journey,” the company said on its expansion plans.  

CASE FILE

 

*  To make offer for 25.90 million shares

 

*  Offer at ₹731 per share

 

*  Company was delisted in 2016

 

*  Delisting then was at ₹262.80 per share