Mumbai - The Ruia brothers-led Essar Group said it will pay an additional Rs 75.48 per share to ex-shareholders of Essar Oil (EOL) who tendered their shares at the open offer prior to the delisting of the company, which was sold to Russia's Rosneft-led conglomerate on August 21.
"Former minority shareholders, who tendered EOL shares in the delisting offer of 2015, will receive the differential amount of Rs 75.48 for every share tendered, based on the current closing numbers, following the closure of the sale transaction with Rosneft and the Trafigura-UCP consortium," the group said in a statement.
"The payment of around Rs 880 crore will be in addition to the Rs 3,064 crore paid to the minority shareholders following EOL's delisting in 2015," it said.
This takes the total payout to Rs 3,944 crore, the statement added.
Essar said the amount represents the additional payout over and above the price of Rs 262.80 per share paid to shareholders at the time of delisting on the basis of equity price per share of Rs 338.28 received by Essar on concluding the deal.
On August 21, Essar Oil announced the closure of the company's sale, including its Vadinar refinery, to Russian state-run Rosneft-led consortium for $12.9 billion, which was followed by the appointment of a new board of directors for EOL as well as a new chief executive.
According to an Essar Oil statement, the transaction, which was initiated in 2016 on the sidelines of the BRICS leaders summit in Goa, represents the largest foreign direct investment (FDI) into India till date.
It is also Russia's single-largest foreign investment made anywhere in the world.
The deal includes acquisition of Essar Oil's 20 million tonne Vadinar refinery in Gujarat and its retail outlets, as well as the Vadinar Port.
Essar Capital Director Prashant Ruia said in a statement that the EOL sell-off had allowed the group to "substantially deleverage our portfolio companies' balance sheets, reducing debt by over $11 billion, or Rs 70,000 crore."
The Securities and Exchange Board of India (Sebi) had earlier asked the promoters to pay back the difference in the delisting price and final transaction price between Essar and Rosneft and the consortium consisting of Dutch commodity trader Trafigura and the Russian investment bank United Capital Partners.
"In 1995, when we in Essar Oil did our first IPO, the market cap of the company was Rs 2,000 crore. Now, with this increased payout, the market cap is Rs 50,400 crore, which is the price at which we are paying out these additional value to the shareholders," Prashant Ruia said.
"This is really the first time that a company is paying out additional funds to the shareholders nearly two years after the delisting," he said.
Essar Group founder Shashi Ruia said: "We have always believed in creating value for all our shareholders. I am extremely happy with this outcome where we could maximise returns for our shareholders who had invested and believed in us."
Essar Energy Holdings director Dhanpat Nahata said in the statement: "The additional payment to minority shareholders is unprecedented as they got exit and liquidity upon delisting in December 2015, retained the upside from the transaction that has closed 20 months later, without carrying any downside risk."
The promoters will shortly issue a public notice in this regard, and as committed in the delisting offer of December 2015, the additional payout will be made within two months thereafter, the statement added.
Ruia, however, did not elaborate further to the news channel regarding the group's debt repayment plans.
"From Essar's perspective we were already talking to the banks earlier for a restructuring plan and we will continue with that process of providing a resolution plan in the IBC (Insolvency and Bankruptcy Code) process," he said.