 "Essar Oil delisting, once stuck, now through")
The much-talked-about Essar Oil de-listing finally got through on Wednesday, as it got the nod from the Securities and Exchange Board of India (Sebi). The regulator also allowed the BSE to accept a bid by Life Insurance Corporation of India (LIC) for 20 million shares of the promoters' buyout offer.
The de-listing had landed in the soup on Tuesday when a large block of tendered shares could not be accepted within the stipulated time due to technical glitches on the BSE.
The BSE had referred the matter to Sebi, when the bid was not accepted due to technical glitches.
Sebi looked into the matter and consulted all stakeholders, including Essar Oil, LIC, BSE and the custodian for LIC shares, Stock Holding Corporation. "Sebi has now given its go-ahead for the confirmation of those shares," said sources privy to the development at the exchange and the regulator.
It is learnt that Sebi is looking into the matter and would seek a report from the exchange on technical issues.
It is estimated that the offer has received total bids for an estimated 101 million shares, against a requirement for 92.6 million shares for the offer to succeed.
However, nearly 20 million shares tendered by LIC had remained 'unconfirmed' on the stock exchange platform till the time of the scheduled closure of the offer at 3.30 pm on Monday.
According to people in the know, the bids from LIC had come well within the scheduled time as shares tendered even later than LIC's bid got confirmed, but some "technicalities" led to the LIC shares remaining in the 'unconfirmed category'.
"Due to technicalities relating to the timing of the confirmation of some of the institutional offers received for the de-listing process of Essar Oil, the matter is being referred to Sebi for their decision," the BSE had said earlier.
The de-listing offer saw shares getting tendered at a Reverse Book Build discovered price of Rs 262.80 each, which is at about 80 per cent premium to the floor price of Rs 146.05. Essar Oil shares had closed sharply higher at Rs 243.35 apiece on the BSE on Monday, a gain of nearly 8.5 per cent.
The stock was trading above six per cent higher at Rs 253.65 at the end of the day's trade on Wednesday. The de-listing had begun on December 15. The promoters have offered to de-list the company from local bourses by buying out the non-promoter shareholding of 28.54 per cent.
The promoters of the company have signed a non-binding term sheet with Russian oil major Rosneft for sale of up to 49 per cent stake in Essar Oil.
'Improve rating process'
The Sebi's international advisory board has suggested that the market watchdog should work on improving the rating process, increase transparency, and reducing conflict of interest.
These suggestions assume importance in the wake of the recent Amtek Auto crisis, which had the regulator examining the role of credit rating agencies.
Sebi in an order last month had allowed Essar Oil de-listing to go through, which had been stuck for two years due to complaints against the de-listing exercise.
To ensure the shareholders are not deprived of the correct value of their shares Sebi had put in a caveat. If the transaction with Rosneft materialises and the price is higher than the de-listing price that was arrived at after the reverse book building exercise, then the promoters would need to pay the difference.
