Essar misses deadline to pay oil company’s shareholders

Essar Group has missed the deadline for paying minority shareholders of Essar OilBSE -0.15 % almost Rs 900 crore, which was due to them following its sale to Russia’s Rosneft and other partners.

Investors told ET that they are yet to receive the payment from the group, which was directed by the Securities and Exchange Board of India (Sebi) to pay them Rs 75.48 per share before October 27, in addition to the delisting price of Rs 262.80 that was already paid.

In response to an ET query, an Essar group spokesperson said the company reiterates its commitment to complete its payment obligations to minority shareholders.

“The company has sought an extension of eight weeks from Sebi since the purchasers have recently proposed that certain adjustments be made to the consideration amount and the same is being discussed between the parties,” the spokesperson said in an email reply.

Essar Oil delisted from the bourses in 2015. At the same time, it was in talks with Rosneft for a stake sale. The deal was signed in October 2016.

Sebi in November 2015 asked Essar Group to pay the difference between the transaction price with Rosneft and the final delisting price to those shareholders whose shares were accepted. Sebi, in its order, also asked the Essar group to make a public notice, and pay to investors the difference within two months of such a notice.

On August 28, Essar Group said that they would pay the additional amount by two months. “As stated in the August 28 public notice, the price differential payable to minority shareholders will be determined based on the amount received by the company per cent as adjusted in accordance with the Rosneft SPA and the Consortium SPA,” the group spokesperson said in an email response on Tuesday.

“Essar group cannot delay the payment unless it has taken prior approval from the regulator,” said Shriram Subramanian, founder and managing director, InGovern Research Services, a proxy advisory firm. “Sebi should take action in case of any violations.”

Link: Economic Times- 01 Nov 2017