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January 25, 2007 14:19 IST
Ruias-controlled Essar group on Thursday said it will delist its two steel and oil arms from stock exchanges to gain more flexibility in running the companies.
Essar Steel Holdings Ltd and Essar Energy Holdings Ltd, the parent companies and largest shareholders of Essar Steel and Essar Oil, have sought delisting from the Bombay Stock Exchange and National Stock Exchange.
Essar Steel and Essar Oil will seek their approval from their board of directors for delisting on January 29 and 30 respectively.
Shares of both the companies rose more than 10 per cent on the bourses. While Essar Oil was ruling at Rs 63.40, Essar Steel changed hands at Rs 53.05 in intra-day trading.
"The delisting of equity shares will offer more flexibility in operations and management of the company, greater efficiencies and provide an exit opportunity for shareholders," the two companies said in separate statements.
Essar Steel Holdings and Essar Energy Holdings are Mauritius-based subsidiaries of Essar Global Ltd and largest shareholders as well as promoters of the soon-to-be-delisted entities.
The promoter stake currently stands at 87 per cent and 88 per cent in Essar Steel and Essar Oil respectively. Essar Steel Holdings and Essar Energy Holdings plan to follow the voluntary delisting method, the statements said.After obtaining the consent of the Board and shareholders, a public announcement would be made as per SEBI's delisting guidelines for determining the exit price to be paid to shareholders. Essar Oil had in November last year commissioned its 7.5 million tonnes Vadinar refinery in Gujarat, while Essar Steel has production capacity of more than four million tonnes per year at Hazira. The Ruias had last year also delisted Essar Shipping, Essar Teleholdings and its BPO arm Aegis Communications.
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