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Essar Energy Plans to Raise $2.5 Billion in Offer of 25% Stake

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By Rakteem Katakey

April 8 (Bloomberg) — India’s Essar Group, seeking to buy three refineries from Royal Dutch Shell Plc, said it may raise $2.5 billion by selling shares in the U.K. and elsewhere.

Essar Energy Ltd., a holding company for the group’s energy businesses, plans to offer a 20 to 25 percent stake to institutional investors, the company said in an e-mailed statement today. The proceeds will be spent on the group’s power, refinery and oil and gas exploration projects.

Essar, owned by billionaires Shashi and Ravi Ruia, is raising funds as it seeks to acquire refineries, steel plants and coal and iron-ore mines across the world to compete with rivals. Indian companies including Reliance Industries Ltd. and Bharti Airtel Ltd. have sought assets overseas to take advantage of cheaper valuations after the worst global financial crisis in 70 years.

Group company Essar Oil Ltd., which has a market value of $4.1 billion, rose 5 percent to 153 rupees at 11:53 a.m. in Mumbai trading. The stock has advanced 18 percent in the past year, trailing the benchmark Sensitive Index’s 66 percent gain.

JPMorgan Cazenove Ltd. is the sole financial adviser and only sponsor of the planned offer, Essar Energy said. JPMorgan Cazenove and Deutsche Bank AG are the joint global coordinators.

–Editors: John Chacko, Ryan Woo.

To contact the reporter on this story: Rakteem Katakey in New Delhi at [email protected].

To contact the editor responsible for this story: Amit Prakash at [email protected].


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