The Board of Essar Oil on Sunday agreed to its promoters’ proposal to de-list the company from Indian bourses.

After de-listing Essar Energy plc from London Stock Exchange (LSE), the Ruia-brothers controlled Essar Group on June 20 had announced their intention to de-list Essar Oil from Indian bourses.

Essar Oil in a statement said its Board of Directors met on Sunday to consider the de-listing proposal.

It agreed “to consent to the delisting proposal pursuant to and in accordance with Regulation 6(I)(e) of SEBI Delisting Regulation”.

The board agreed to seek the consent of the shareholders of the company for the de-listing proposal by way of postal ballot and e-voting.

In a notice to the Bombay Stock Exchange, Essar Oil said it had received a letter from its promoter, Essar Energy Holdings Ltd (EEHL) for voluntarily de-listing of the equity shares of the company from BSE and National Stock Exchange by purchasing shares held by public.

Mumbai-based Essar Group wants to buy all the shares it doesn’t already own in Essar Oil. Turning it private would give billionaire brothers Shashikant and Ravikant Ruia a free hand to revamp the companies.

Currently, the company’s public shareholders hold 137.123 million equity shares or 27.53 per cent.

Ruia-brothers’ holding firm EEHL, a company incorporated in Mauritius, holds 71.22 per cent stake in Essar Oil.

The de-listing proposal, EEHL said, was as part of its business strategy of taking the entire hydrocarbon/energy business private (unlisted) following the delisting of shares of Essar Energy plc from LSE on June 10.

“EEHL believes that the company requires sustained, substantial investment to develop and grow its businesses (especially the refining and marketing business). Full ownership of the company will provide EEHL with increased operational/financial flexibility to support the company’s businesses and strategic needs,” the promoters said in the letter to Essar Oil.

The proposed de-listing was in furtherance of the strategic intent of the promoters to achieve greater flexibility for equity infusion into the company.

“EEHL believes that the delisting of the company’s equity shares will be in the interest of the public shareholders of the company as it will provide them with an exit opportunity from the company at a price determined in accordance with the reverse book building mechanism set out in the SEBI Delisting Regulations,” the promoters said in the letter to Essar Oil.

The price payable by EEHL for the acquisition of the public shareholders’ shares would be the price at which the maximum number of shares are tendered in a reverse book-building mechanism.

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