The Hindu Business Line : Essar Oil, Steel to delist from exchanges

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Mumbai Jan 25 The Ruias of Essar have decided to quit the bourses. The group today announced the decision to delist Essar Steel Ltd and Essar Oil Ltd from both the BSE and the NSE, the premier exchanges.

The boards of Essar Steel and Essar Oil will meet on January 29 and 30 respectively to consider the decision, the companies informed stock exchanges on Thursday.

The group is already in the process of delisting Essar Shipping, another group company.

Earlier, it had delisted its telecom arm, Essar Tele-Holdings Ltd, and its US-based BPO subsidiary, Aegis Communications Group.

With today's announcement, the Group will become a privately held group with its holding company, Essar Global, based in the tax haven of Cayman Islands.

The group has been in the news recently for its plan to buy out Hutchison Essar, its majority partner in the cellular business.

On the group's decision, a company official said: "With the promoters holding more than 85 per cent stake in these companies, there is no meaning in them being listed on the stock exchanges."

The official added: "Delisting will give more flexibility in operation and management of these companies."

From the shareholders' point of view, they will get an exit option, he said.

Currently, promoters hold 87.08 per cent equity in Essar Steel, financial institutions 2.79 per cent and the public 10.13 per cent.

In Essar Oil, which has just commissioned its refinery in Vadinar in Gujarat, the promoters hold 87.96 per cent, FIs 4.48 per cent and the public 7.56 per cent.

Essar Shipping was the first group company to go public (in 1985), followed by Essar Steel in 1988 and Essar Oil in 1995.

Today, the group has interests in telecom, power, steel, oil, shipping and BPO.

According to a group official, the promoters increased their holding through their overseas holding company, following the issue of GDS and FCCBs by the group companies.

The promoters' stake in Essar Steel increased from 56.61 per cent in 2003 to 57.18 per cent in 2005 and to 87.08 per cent currently.

The Essar Steel stock gained 4.37 per cent to close at Rs 50.15 on the BSE on Thursday, while Essar Oil gained 10.39 per cent to close at Rs 63.2.

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