Essar Oil sets Rs 146.05 as Floor Price for delisting ~ Current Market Price is @ Rs 210 ~ What will be the discovered price ?
Some Critical Questions yet in the air
- Six Years ago,LIC had picked up Rs 300 crs+ of Essar Oil in January 2010 at Rs 140 a share ~ Will they be participating in the delisting exercise and at what price? ~ assuming 15% CAGR the price is Rs 320+ ~ hope they support the concerns and interests of the smaller Minority shareholders ~ nasty suspicion that they will not and it’s probably a done deal between Essar Group and them !
- Essar Oil Promoter Group Companies have committed, as per SEBI Order in November 2015 that cleared the controversial delisting,that they will going forward pay also any difference incremental between Rosneft Deal price (yet being negotiated) and the actual delisting price .However this commitment is only to those who’s shares have been accepted in this delisting exercise ! What then is the fate of those minority shareholders who do not participate in this delisting exercise or who’s shares are not accepted!?
- SEBI Order gets Essar Group Price Differential Commitment only for stake sell to Rosneft being negotiated ! ~ What if Essar Group does stake sale to any other instead !? ~ Recent News Reports talks of interest from others
SEBI & Essar Group need to clarify on Points 2 & 3 above
In fact SEBI should have only given the green signal for delisting once the Rosneft Deal Price was declared
Check out my below blogposts right from June 2014 where I have strongly raised these issues and more to highlight how Essar Group cares little for Minority Shareholder Interests.
If Essar Group had had their way they would have delisted at a pathetic floor price of Rs 108 last year ~ In a sense these shares would be then have been on their way to being offloaded to Rosneft at twice or thrice the price !
Monday, November 9th, 2015
Monday, July 20th, 2015
Monday, July 6th, 2015
Wednesday, July 23rd, 2014
Saturday, June 21st, 2014
Update on Tuesday,December 8,2015
The Delisting Opens on December 15,2015 and closes on December 21,2015
All those who held the share on December 5,2015 will be dispatched the Offer Documents on December 11,2015
Should a Holder participate in this Delisting & if so at what Price should he tender ?
This is where the SEBI Order is flawed ! because it closes the door to public shareholders leaving them no option but to tender the shares in the Delisting Offer !
Because if a shareholder does not tender in the delisting offer or tenders at above the discovered price to be announced by Promoter on December 30,2015 and his tendered price is not the Exit Price and the Promoter accepts the Discovered Price or offer an Exit Price at it’s discretion even above the Discovered Price but below shareholders tendered price then his shares will not be accepted
Staying away from the Delisting Offer or having tendered shares rejected in the delisting will disqualify the Shareholder from receiving any incremental between Rosneft Deal Price going forward if higher than Exit Price announced by Promoter in this Delisting
Such a Shareholder will thus get only the Delisting Exit Price going forward
On more thing I reiterate ! What if there is no Rosneft Deal but Essar Oil enters into a deal with some other Entity for a strategic stake !? Then the committment by Promoters for any Incremental payable to Shareholders will be off ! as SEBI Order merely mentions such a committment for only a potential Rosneft Deal going forward
The Delisting can only fail if all public shareholders unite and not tender or tender at a much higher Price in excess of Rs 300 or Rs 350 perhaps !