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Minority shareholders in Essar Oil can expect the floor price for the delisting of its shares to be reset in the ₹147-150 range, according to preliminary calculations made by market experts. The original floor price had been set at ₹108.15 when the delisting had been approved by shareholders in August 2014.
SEBI direction Since the delisting process had been held up for the approvals required from stock exchanges, equities and commodities market regulator SEBI relaxed the norms for the company, in an order issued on Friday, and extended the time frame for delisting by two months. However, it added that the floor price must be revised accordingly.
The order by SEBI Whole Time Member Prashant Saran also took into account Essar Oil’s preliminary agreement to sell 49 per cent stake to Russian oil major Rosneft. While the deal size is still under wraps, SEBI has said if the price at which Rosneft acquires each share is higher than the final delisting price given to current minority shareholders, then the price difference must also be paid later to these shareholders.
A spokesperson for parent company Essar Energy Holdings said: “We are delighted to have received SEBI’s order relating to the delisting of Essar Oil, which is in the interest of public shareholders.”
Investor complaints The delisting process had been delayed because of investor complaints made to SEBI questioning certain financial transactions made by Essar Oil and the correctness of the company’s balance sheet. The SEBI order says that the Institute of Chartered Accountants of India will be asked to examine the company’s books.
However, proxy advisories — who advise minority investors — are unhappy with the regulator’s decision. They had wanted minority investors to be given another chance at approving the delisting process, given that the proposed Rosneft acquisition would likely improve the company’s fortunes.
JN Gupta, Managing Director, Stakeholders Empowerment Services, says: “The approval for delisting was given by minority shareholders before they knew about the Rosneft acquisition,” he said. Additionally, the SEBI order is silent on why Rosneft is not making an open offer despite such a large stake sale by the company, Gupta added.
Ruias-promoted Essar Oil, the country’s second-largest private refinery, reported a 14 per cent fall in net profit to ₹201 crore in the September quarter, from ₹234 crore in the corresponding period of the previous year.
The stock on Monday closed at a new 52-week at ₹203.55 on the BSE on Monday.
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