umbai: Capital market regulator Securities and Exchange Board of India (Sebi) on Friday

granted some relaxation from delisting norms to Essar Energy Holdings Ltd on the imminent
takeover of its subsidiary Essar Oil Ltd by Russian oil company OJSC Rosneft Oil Co.
On 15 July, Essar Energy had sought exemption on time lines for Essar Oil for the latters
proposed delisting from exchanges. Earlier, Essar Oil had announced that it will sell a 49% stake
to Rosneft.
Sebi said it received complaints from some shareholders, alleging that Essar Oil did not disclose
the pricing of its deal with Rosneft and that it would be unfair if the Rosneft deal is agreed to at a
share price that is higher than the floor price to be set for public shareholders for Essar Oils
delisting.
On Friday, Sebi asked the promoter to expeditiously make the public announcement on delisting
and specifically mention therein that the floor price will be as per delisting norms.
Sebi said that keeping the minority shareholders interests in mind, the company will be allowed
to make the final application for delisting within two months of Fridays order.
Delisting norms require a listed company to make the final application for delisting to the stock
exchanges within a year of the passing of the special resolution by shareholders. Accordingly,
Sebi said the company was supposed to file the same by 5 August, considering that the
shareholders approved the delisting proposal on 4 August 2014.
However, the company in a letter to Sebi, said it could not file the final application as the inprinciple approval was obtained on 15 July and the promoter required additional time to
complete the financial and operational arrangements.
On 1 September, the promoters requested Sebi to allow the company two months from the date
of approval to file the final delisting application with the stock exchanges, and to allow the
company five days from the date of public announcement for dispatching the letters of offer to
public shareholders.
Sebi agreed to these relaxations.

But it did so on the condition that the promoters of Essar Oil will pay the difference between the
transaction price with Rosneft and the final delisting price to shareholders whose shares are
accepted in the delisting, if the former is higher.
In case the deal with Rosneft is inked after the delisting, the promoters of Essar Oil will be
required to pay the difference to shareholders within two months, Sebi ordered.
We are delighted to have received the Sebis order related to the delisting of Essar Oil Ltd,
which is in the interest of public shareholders, said a company spokesperson of Essar Energy
Holdings Ltd in an emailed reply on Saturday.
This ensures that the minority shareholders of the company are not short-changed in the process
of de-listing while the company unlocks its value through a stake sale, said analysts and proxy
advisers.
I think this is good for the shareholders as they finally get an exit option and at the same time
get a higher value for their holding also, said Shriram Subramanian, managing director of
InGovern Research Services, a proxy advisory firm, and added that the Sebi order is in the right
spirit.
However, J.N. Gupta of Shareholder Empowerment Services, another proxy advisory firm, said
Sebi should not have given an extension.
Once Essar Oil is delisted, it will not fall under the purview of disclosures that listed companies
have to do and this will mean a lot of information regarding the operational efficiencies flowing
to Essar Oil with the Rosneft deal will not be public information. Therefore, the shareholders will
never see the real value of the company and benefit from it, he said.