Essar Ports sets delisting price at a premium
Photo Credit: Courtesy: Essar Ports

Promoters of the public-listed Essar Ports Ltd (EPL)—one of India’s largest port operators involved in port and terminal services for liquid, dry bulk, break bulk and general cargo—have accepted the discovered price of Rs 133 a share as the exit price for acquiring up to 107.2 million equity shares from public shareholders.

The company's scrip last traded at Rs 128.65 a share, up 0.78 per cent on BSE in a weak Mumbai market. The share price had hit a high of Rs 137.35 a unit in March this year and had rebounded after sinking to Rs 83.75 a share in August.

The promoter group— including Essar Shipping and Logistics Ltd, Essar Ports and Shipping Ltd (formerly Essar Port Holdings Mauritius Ltd), Essar Projects (India) Ltd, Essar Steel India Ltd and Essar Global Fund Ltd (formerly Essar Global Ltd)—collectively holds 74.94 per cent of the total share capital of Essar Ports.

Last month, it had fixed Rs 93.66 as the floor price per share for acquiring 107.2 million equity shares or around 25 per cent equity stake from public shareholders.

The board of the Essar Group had approved delisting of Essar Shipping and Essar Ports from the stock exchanges last year, citing lack of investor appetite and the promoter group’s need for increased flexibility in running the firms.

JM Financial Institutional Securities Ltd is acting as the manager to the offer, while Axis Capital has been appointed as an advisor.

The open offer opened on October 30 and closed on November 5. The firm is yet to disclose how many shares were tendered in the open offer.

At this price, promoters would shell out at least Rs 858 crore for delisting the firm (to meet the delisting threshold of 90 per cent holding) and Rs 1,427 crore for full buyout of minority stake in the company from public shareholders.

Essar Ports Ltd (formerly Essar Shipping Ports & Logistics Ltd) operates as a sea logistics company in India. It has three operational terminals at Hazira, Vadinar and Paradip, with a capacity of 104 MMTPA. The company aims to expand its capacity to more than 200 MMTPA over the next few years.

Currently, it is building a coal berth of 14 MMTPA at Paradip Port and a 20 MMTPA dry bulk terminal at Salaya in Gujarat besides increasing the capacity of Hazira port by 20 MMTPA.

For the quarter ended September 30, 2015 it reported an 8.7 per cent increase in consolidated net profit to Rs 104.5 crore over the year-ago period. In the same period, its revenues rose from Rs 398.8 crore to Rs 421.8 crore.

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