Essar Energy prices London IPO at 450-500 pence a share

London, Apr 22 (PTI) Essar Energy, promoted by Indian
billionaires Ruias, is believed to have proposed a price of
450-500 pence per share for its upcoming IPO here, which will
take the total funds to be raised to up to USD 2.5 billion.
The proposed price band would value Essar Energy Plc in
the range of USD 9.5-11 billion upon its listing on the London
Stock Exchange, banking sources said.
When contacted, a company spokesperson declined to
comment on the pricing.
The IPO, wherein Essar Energy plans to raise up to USD
2.5 billion, is billed as the largest from an Indian company
and has the potential to push the company to the top 50 of the
bourse's key index FTSE 100 after listing.
Essar Energy is planning to sell 20-25 per cent stake,
as per a term sheet being circulated among the potential
investors. The book building for the public offer opened on
Thursday and would close on April 29, according to the terms.
JPMorgan Cazenove Ltd and Deutsche Bank AG are the joint
global coordinators.

Bankers said that the IPO generated good interest among
investors during its roadshow covering London and New York,
besides other places in Europe and Asia.
Sources said that the issue managers hosted a luncheon
meeting with investors on Wednesday and again a breakfast
meeting on Thursday morning in London, and found the response
encouraging.
The proposed IPO will be Essar's first offering to
investors after a gap of 15 years.
The Essar Group is a multinational conglomerate and a
leading player in the sectors of steel, energy, power,
communications, shipping ports & logistics, construction, and
minerals. With operations in more than 20 countries across
five continents, the Group employs 60,000 people and has
revenues of USD 15 billion.
Essar Energy PLC comprises the group's power and oil &
gas businesses and the proceeds would be used to fund the
expansion in these verticals.
Earlier this month, the company made public its intention
for a public float in the London Stock Exchange and filed
relevant papers with the UK authorities.
While Ravi Ruia will serve as Essar Energy's chairman,
son Prashant Ruia would be vice chairman and Naresh Nayyar
would become CEO.
Its board would have Simon Murray, Philip Aiken, Subhash
C. Lallah and Sattar Hajee Abdoula as independent directors.
Essar Energy has plans to increase its power generation
from 1220 MW to 11470 MW sand has interests around the world
in 14 prospective oil, gas and coal seam gas exploration
blocks.
The Group has plans to raise its refining capacity at the
Gujarat-based Vadinar refinery to 375,000 bpd by 2011 from the
current capacity of 300,000 bpd. If market conditions permit,
the refinery capacity will be further increased to 750,000 bpd
by 2013, making it India's largest single location refinery.
Essar also needs funds to carry out exploration and
production across its global portfolio of oil and gas blocks
in Asia, Africa and Australia. Additionally, the Group's Power
business, which is scaling up from 1,220 MW currently to 6,100
MW in Phase I and 11,470 MW in Phase II, will need capital
infusion. PTI BJ
MYR