This proposed stake sale to UK institutional investors will be used to develop the company’s energy assets
The Ruias-owned Essar Energy Ltd today announced plans to raise about $2.5 billion (over Rs11,250 crore) through an initial public offering (IPO) in the UK.
Upon completion, the promoters Ruias’ Essar Group would hold a minimum of 75% in Essar Energy, and would be listed on the London Stock Exchange (LSE), Essar Energy vice chairman Prashant Ruia said, reports PTI.
Essar Energy has initiated the process of seeking regulatory clearances in the UK for the IPO, proceeds of which would be used for expansion of its refinery, setting up more power projects and developing coal-bed-methane (CBM) and other energy assets.
Essar Energy intends to apply for its shares to be admitted to the official list of the Financial Services Authority in the UK and for trading on the LSE’s main market for listed securities.
On completion of the offer, it is expected that Essar Energy will be considered for inclusion in the FTSE 100 index.
“This will be a landmark event both for Essar Group and Essar Energy. At the time of the offer we would have already $2 billion of capital in Essar Energy. A London listing gives us an excellent platform to showcase the potential of the Indian market to the world,” Essar Energy chairman Ravi Ruia said.
Prashant Ruia said, “Now is the right time to open the business to global capital to fuel future growth ambitions and address India’s significant energy deficit. This offer will help us bridge that deficit while allowing international investors access to India's growth story.”
The entity will enable a single-window clearance for hotel projects to boost tourism
The approval to form the proposed Hospitality Development Promotion Board (HDPB), which is expected to facilitate easier clearance for hotel projects, is likely to come over the next few months, a senior government official said today, reports PTI.
“The committee of secretaries has given the approval (for HDPB). The draft for this will be sent to the Cabinet and approval is expected in the next few months,” said Sujit Banerjee, tourism secretary.
The formation of HDPB is expected to enable a single-window clearance for hotel projects in the country and thus help to boost the tourism industry.
Mr Banerjee said that the country would require around 1,50,000 hotel rooms by 2013 to support the revival in the tourism sector.
Out of this, nearly 1,00,000 rooms are expected to come up in the budget segment, he said, adding that tourist flows into the country have picked up over the past few months.
Replying to a query, Mr Banerjee said around 70% of the hotel infrastructure required for the forthcoming Commonwealth Games has been completed.
Stake sale to take place in two tranches of 10% each; Centre’s stake to fall to 69%
The government today approved a 20% disinvestment in Steel Authority of India Ltd (SAIL) that would fetch a total of Rs16,000 crore, reports PTI.
Following the two-tranche disinvestment, the government and the company would get Rs8,000 crore each, home minister P Chidambaram told reporters after a meeting of the Cabinet Committee on Economic Affairs.
Post disinvestment, the government's equity will fall to 69% from 85.82% currently.
The stake sale will take place in two tranches of 10%, Mr Chidambaram said, adding that each time 5% will be through follow-on public offers (FPOs) and another 5% through sale of government equity.
SAIL shares were trading at Rs248.25, down by 2.67% on the BSE.