Whether the Ruias’ attempt to take Essar Energy private will be successful should become apparent in the next 10 days.

The move by the Ruias to return London-listed Essar Energy to private hands via a Mauritius-incorporated subsidiary of the Ruias’ investment vehicle, Essar Global Fund Ltd, has been strongly resisted by some of the minority shareholders who own 22 per cent of the company. Over the weekend details emerged of letters that had been sent to the UK Government and the Indian High Commission in London, appealing for their intervention.

Following the publication of the offer document in mid-April, the Ruias will be able to close the offer next Friday and proceed with the delisting, with or without the support of minority shareholders — or further extend the deadline for another fortnight in the hope of garnering more shareholder support.

The Ruias’ ability to declare the offer unconditional and start the delisting process (they have more than the 75 per cent threshold needed to do this) had put shareholders “under duress” to accept the offer, which Essar Energy’s own independent committee had judged to materially undervalue the company, wrote Robert Hingley of the Association of British Insurers (ABI), which is leading the investor fight-back.

The ABI has formed a committee representing a total of 8.6 per cent of minority shareholders and hired law firm Skadden Arps Slate Meagher & Flom as a legal adviser. “The committee is exploring… all available options to resist” the delisting, the ABI said in its letters.

Reputational damage

Should Essar go ahead with the delisting against the wishes of the majority of minority shareholders, the reputational damage could make it harder for Indian firms hoping to list in London, the investors warned, calling on High Commissioner Ranjan Mathai and the Government to “draw these wider issues to the attention of Essar and the Ruia family.”

The investors also pointed to the use of Stanlow, the UK refinery acquired by Essar Energy in 2011, as collateral in financing the attempted takeover through VTB Capital.

However, investors have also been critical of Britain’s Financial Conduct Authority, which is set to introduce new rules that would require minority shareholder consent for a delisting as early as May 16, following a meeting on May 1.

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