Essar Energy launches $2.5 billion IPO in LSE
22 Apr 2010
Essar Energy, part of the Essar Group, one of the country's conglomerates today launched an initial public offer (IPO) at the London Stock Exchange (LSE) to raise as much as $2.5 billion - London's biggest IPO since 2006 - to fund its expansion plans.
According to the term sheet, Essar Energy is selling about 20-25 per cent stake by pricing the share in the range of 450-550 pence and will be on sale on sale until 29 April with Essar Group holding the remaining 75 per cent of Essar Energy's issued share capital.
The listing would value Essar's energy in the range of $9.5-11 billion, and the IPO would be the second-largest IPO, behind the $3 billion listing of Reliance Power in early 2008.
The IPO, which is being managed by JPMorgan Cazenove and Deutsche Bank AG will be Essar's first offering to investors since 1995.
Early last month, the media had speculated that the Essar Group was considering raising up to $3 billion (Rs13,827 crore) by listing its oil and power assets on the LSE since it was one of the strongest options to finance the group's $8-9 billion expansion plan and rank it among the leading player in India's oil refining and electric power generation sectors. (See: Essar Group plans LSE listing to raise $3 billion)
Essar, with $15 billion of revenues, is controlled by brothers Shashi and Ravi Ruia, who are joint fifth on Forbes' Indian rich list.
Essar has interests in telecommunications - including a joint venture with Vodafone of the UK - as well as steel, power, oil refining and outsourcing, in countries from the US to Kenya and parts of Asia.