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Ten days after the Ruia's delisted Essar Energy plc from the London Stock Exchange (LSE), they have decided to delist Essar Oil from the stock exchanges in India.
Essar Oil in a statement to the stock exchanges said, “The company has received a letter dated June 20, 2014 from Essar Energy Holdings informing us of a proposal to voluntarily delist the equity shares of the company currently listed on the Bombay Stock Exchange and National Stock exchange by purchasing shares held by public.”
This means, the Essar Group would buy all the shares it doesn't own in Essar Oil. The number of equity shares held by public shareholders are 137.123 million or 27.53 per cent. Promoter firm, Essar Energy Holdings, incorporated under the laws of Mauritius, holds 71.22 per cent stake in Essar Oil.
A board meeting of Essar Oil has been scheduled for June 23 to consider the proposal to delist. "The promoter has requested the (Essar Oil) Board to: (a) approve the delisting proposal; and (b) seek the requisite approval of the delisting proposal from the equity shareholders of the company through a postal ballot," Essar Oil said.
EEHL said to delist Essar Oil was as part of the business strategy of taking the entire hydrocarbon business private after the delisting of shares of Essar Energy plc from LSE on June 10.
Giving the rationale behind delisting, the company said, "EEHL believes that the company requires sustained, substantial investment to develop and grow its businesses (especially the refining and marketing business). Full ownership of the company will provide EEHL with increased operational/financial flexibility to support the company's businesses and strategic needs."
"The delisting proposal if successful would provide an attractive exit opportunity to the Public shareholders of the company. The price at which the equity shares will be acquired from the public shareholders of the company under the delisting offer will be determined in accordance with the Sebi delisting regulations," the company said.
Shares of Essar Oil were up 1.64 per cent at Rs 108.40 on the Bombay stock exchange.
