Essar Energy plans LSE listing of $2.5 billion IPO
08 Apr 2010
The Essar Group today announced plans to raise $2.5 billion (Rs11,110 crore) by listing its oil and power assets of Essar Energy on the London Stock Exchange (LSE).
The listing by Essar, a diversified group with interests from shipping to mobile telephony, would be the biggest overseas listings by an Indian company after mining company Vedanta Resources raised $825 million on LSE in 2003.
Essar will list 20-25 per cent of its enlarged capital on the LSE since, under LSE rules, the company would be required to list 20-25 per cent of the energy company and the Essar Group will hold 75 per cent of the shares.
The LSE listing, which was planned early last month, (See: Essar Group plans LSE listing to raise $3 billion) would value Essar's energy businesses at around $11 billion.
The size of the listing will also be the biggest in the LSE since May 2008 and the Essar listing would also be a boost to the LSE, which recently lost out on the listing of Rusal, the aluminium group controlled by Russian oligarch Oleg Deripaska. It opted to float on the Hong Kong exchange instead.
Essar said it would use the proceeds from the IPO to fund some of its existing growth projects, including the acquisition of coalmines, to expand power capacity as also for development and exploration of oil and gas blocks.