TIDMESSR
RNS Number : 7622G
Essar Global Fund Limited
09 May 2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
FOR IMMEDIATE RELEASE
9 May 2014
ENERGY BIDCO HOLDINGS LIMITED
an indirect wholly-owned subsidiary of
ESSAR GLOBAL FUND LIMITED
PROPOSED ACQUISITION OF ESSAR ENERGY PLC
----------------------------
Offers declared wholly unconditional and extension of the
Offers
Introduction
On 14 March 2014, Essar Capital Limited, the dedicated
investment manager for Essar Global Fund Limited ("EGFL"),
announced a proposed cash acquisition by an indirect wholly-owned
subsidiary of EGFL, Energy Bidco Holdings Limited ("Bidco"), of the
minority shares in Essar Energy plc ("Essar Energy") that EGFL does
not already own (the "Shares Offer") and the US$550,000,000 4.25
per cent. convertible bonds due 2016 guaranteed by Essar Energy
(the "Bonds Offer", and together with the Shares Offer, the
"Acquisition" or the "Offers").
The full terms and conditions and the procedures for acceptances
of the Shares Offer and the Bonds Offer are set out in the offer
document published by Bidco on 11 April 2014 (the "Offer
Document"). Terms and expressions used in this announcement shall,
unless the context otherwise requires, have the same meanings as
given to them in the Offer Document, a copy of which is available
at www.essarglobalfundltd.com.
Shares Offer and Bonds Offer wholly unconditional
Bidco is today waiving all of the conditions to the Offers as
set out in the Offer Document, and is treating each such condition
as satisfied. Accordingly, Bidco is pleased to announce that the
Shares Offer and the Bonds Offer are both declared wholly
unconditional.
Extension of Offers
Bidco further announces that the Shares Offer and the Bonds
Offer are both being extended and will remain open for acceptance
until the next closing date which will be 1.00 p.m. (London time)
on 23 May 2014.
Essar Energy Shareholders who have not yet accepted the Shares
Offer and Essar Energy Convertible Bondholders who have not yet
accepted the Bonds Offer are urged to do so as soon as
possible.
Further acceptances
The procedure for acceptance of the Shares Offer is set out on
page 5 and in paragraph 15 of Part 1 of the Offer Document and, in
the case of Essar Energy Shares in certificated form (that is, not
in CREST), in the Form of Acceptance. To accept the Shares Offer in
respect of Essar Energy Shares in certificated form, the completed
and signed Forms of Acceptance should be returned to Equiniti, the
Receiving Agent. Acceptances in respect of Essar Energy Shares in
uncertificated form should be made electronically through CREST.
CREST sponsored member should note that only CREST sponsors will be
able to send the necessary TTE instruction to Euroclear.
The procedure for acceptance of the Bonds Offer is set out on
page 6 and in paragraph 16 of Part 1 of the Offer Document and in
the Electronic Instruction Notice. To accept the Bonds Offer, Essar
Energy Convertible Bondholders must submit, or arrange to have
submitted on their behalf a duly completed Electronic Instruction
Notice to the relevant Clearing System in accordance with the
requirements of the relevant Clearing System and in the manner
specified in the Offer Document and in the Electronic Instruction
Notice.
Background to and reasons for the Acquisition
Background
Essar Energy was listed on the London Stock Exchange in 2010,
raising money to be used principally to grow its businesses. EGFL
did not sell any shares in Essar Energy's 2010 listing and has not
sold any since; indeed, EGFL added to its economic interest in the
shares of Essar Energy to a value of US$145 million at a price of
533 pence in January 2011.
Since Essar Energy's listing, its total refining capacity has
increased by more than two times, while power generation capacity
has grown by more than three times. Essar Energy has however, along
with other businesses, been impacted by a series of external
factors, particularly in relation to the economic, legal,
regulatory and tax environment in India and by depressed Western
European refining margins. In this context, it has proved, and
continues to prove, challenging for Essar Energy's management to
give reliable forward-looking guidance.
Essar Energy has seen a significant fall in its share price
resulting in a fall in the value of EGFL's investment in Essar
Energy of approximately US$6 billion since listing. The fall in
Essar Energy's share price is disappointing for all shareholders
and EGFL is concerned about the impact of any further deterioration
in the share price for the stakeholders of Essar Energy.
Offers
Accordingly, EGFL is, through Bidco, making the Offers. Under
the terms of the Shares Offer, Bidco is offering a 17 per cent.
premium to the undisturbed price of the Essar Energy Shares on 13
February 2014. EGFL believes such premium for the shares under the
Shares Offer is broadly in line with other recent equity minority
buy-outs in the UK and with the median of research analysts' target
prices in respect of Essar Energy Shares published in the three
months prior to the Announcement.
Relationship Agreement
A Relationship Agreement was entered into between Essar Energy
and EGFL on 30 April 2010 which expressly provides EGFL or its
associates (including Bidco) with rights to (i) make a takeover
offer by way of a general offer for all the outstanding shares in
Essar Energy and (ii) delist Essar Energy after such takeover offer
has been declared wholly unconditional. The Relationship Agreement
was negotiated on behalf of Essar Energy by its sponsor, J.P.
Morgan Securities, and it was summarised by Essar Energy in its
prospectus and put on display at the time of its listing in 2010.
In implementing the Offers, EGFL is simply exercising its
contractual rights as agreed in the Relationship Agreement and
acknowledged by the Independent Committee in their response
document dated 25 April 2014.
Level of acceptances
As at 1.00 p.m. (London time) on 9 May 2014, Bidco had received
valid acceptances of the Shares Offer in respect of 108,048,246
Essar Energy Shares (representing approximately 8.29 per cent. of
the total issued share capital of Essar Energy and approximately
37.66 per cent. of the Essar Energy Shares to which the Shares
Offer relates). In addition, EGFL already owns 1,016,534,221 Essar
Energy Shares (representing approximately 77.99 per cent. of the
total issued share capital of Essar Energy).
Accordingly, as at 1.00 p.m. (London time) on 9 May 2014,
Bidco/EGFL either owned or had received valid acceptances of the
Shares Offer in respect of, in aggregate, 1,124,582,467 Essar
Energy Shares (representing approximately 86.28 per cent. of the
total issued share capital of Essar Energy).
As at 1.00 p.m. (London time) on 9 May 2014, Bidco had received
valid acceptances of the Bonds Offer in respect of, in aggregate,
18,100,000 Essar Energy Convertible Bonds (representing
approximately 3.29 per cent. of the outstanding Essar Energy
Convertible Bonds). Neither EGFL nor Bidco owns any Essar Energy
Convertible Bonds.
Accordingly, as at 1.00 p.m. (London time) on 9 May 2014,
Bidco/EGFL either owned or had received valid acceptances of the
Bonds Offer in respect of, in aggregate, 18,100,000 Essar Energy
Convertible Bonds (representing approximately 3.29 per cent. of the
outstanding Essar Energy Convertible Bonds).
So far as Bidco is aware, none of these acceptances in respect
of the Shares Offer or the Bonds Offer have been received from
persons acting in concert with Bidco.
Interests in Essar Energy Shares
As at 9 May 2014, Bidco and persons acting in concert with it
had interests in or rights to subscribe for Essar Energy Shares as
follows:
Name Nature of interest No. of Essar % of Essar Energy
Energy Shares total issued share
capital
---------------------- -------------------- --------------- --------------------
Ownership of 5
pence ordinary
EGFL shares 1,016,534,221 77.99
---------------------- -------------------- --------------- --------------------
Bell Shipping
Limited (owned
by Nigel Bell Ownership of 5
and his close pence ordinary
relatives) shares 6,400 0.00049
---------------------- -------------------- --------------- --------------------
Ownership of 5
Nigel Bell (director pence ordinary
of EGFL) shares 2,500 0.00019
---------------------- -------------------- --------------- --------------------
Save as disclosed above, as at 1.00 p.m. (London time) on 9 May
2014, neither Bidco, nor any person acting in concert with it, is
interested in, or has any rights to subscribe for any relevant
securities of Essar Energy, or has any short position (whether
conditional or absolute and whether in the money or otherwise),
including any short position under a derivative or any arrangement
in relation to any relevant securities of Essar Energy. For these
purposes, "arrangement" includes any agreement to sell or any
delivery obligation or right to require another person to purchase
or take delivery of any relevant securities of Essar Energy and any
borrowing or lending of any relevant securities of Essar Energy
which have not been on-lent or sold and any outstanding irrevocable
commitment or letter of intent with respect to any relevant
securities of Essar Energy.
Redemption of the Essar Energy Convertible Bonds
By declaring the Shares Offer wholly unconditional, Bidco notes
that Essar Energy Convertible Bondholders will have the right to
require the issuer of the Essar Energy Convertible Bonds, Essar
Energy Investment Limited, to redeem their Essar Energy Convertible
Bonds at their principal amount, together with any accrued and
unpaid interest, in accordance with the terms and conditions of the
Essar Energy Convertible Bonds. The obligations of Essar Energy
Investment Limited in respect of the Essar Energy Convertible Bonds
are guaranteed by Essar Energy.
Delisting
As set out in the Offer Document, now that the Shares Offer has
been declared wholly unconditional and Bidco has acquired more than
75 per cent. of the voting rights of Essar Energy, Bidco intends,
as agreed in the Relationship Agreement, to procure that Essar
Energy applies to the UK Listing Authority and the London Stock
Exchange, respectively, for the cancellation of the listing of
Essar Energy on the Official List and for the cancellation of
admission to trading in Essar Energy Shares on the London Stock
Exchange, in each case in accordance with the Listing Rules.
Bidco notes the changes to the Listing Rules announced by the
FCA which will come into effect on 16 May 2014. Bidco notes that it
has acquired or agreed to acquire more than 80 per cent. of the
voting rights of Essar Energy and accordingly satisfies the
requirements set out in such changes.
In accordance with the Listing Rules, the requisite notice
period of not less than 20 business days for cancellation of
listing of Essar Energy and admission to trading in Essar Energy
Shares will commence on 12 May 2014. Bidco anticipates that
cancellation of listing and admission to trading will take effect
on 10 June 2014.
Settlement
Settlement for those Essar Energy Shareholders and Essar Energy
Convertible Bondholders who have validly accepted the Shares Offer
and the Bonds Offer respectively by 9 May 2014 will be effected
promptly in accordance with applicable English and US law and
regulation and, in any event, on or before 16 May 2014.
Settlement for valid acceptances in respect of the Shares Offer
and the Bonds Offer received after 9 May 2014 will be effected
promptly after receipt of that acceptance in accordance with
applicable English and US law and regulation and, in any event,
within five Business Days of receipt of that acceptance.
VTB Facilities Agreement amendment and security agreement
Bidco is also announcing in accordance with Rule 26.1 of the
Takeover Code that the website of EGFL has been updated to
include:
-- an amendment and consent letter relating to the VTB Facilities Agreement; and
-- a security agreement dated 9 May 2014 between Bidco and VTB Capital.
The above documents are now available on EGFL's website at
www.essarglobalfundltd.com.
General
In accordance with Rule 30.4 of the Takeover Code, this
announcement will be available on EGFL's website at
www.essarglobalfundltd.com by no later than 12.00 noon (London
time) on 12 May 2014.
Enquiries
VTB Capital (Financial Adviser to EGFL and Bidco) +44 203 334 8726
+44 7947 740
RLM Finsbury 551
Ed Simpkins +44 7917 883
Dorothy Burwell 360
VTB Capital, which is authorised by the Prudential Regulation
Authority and regulated by the Prudential Regulation Authority and
the Financial Conduct Authority in the United Kingdom, is acting
exclusively for EGFL and Bidco and no one else in connection with
the Acquisition and will not be responsible to anyone other than
EGFL and Bidco for providing the protections afforded to clients of
VTB Capital nor for giving advice in relation to the Acquisition or
any matter or arrangement referred to in this announcement.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities pursuant to the Acquisition or
otherwise. The Acquisition will be made solely by the Offer
Document, which contains the full terms and conditions of the
Shares Offer and the Bonds Offer, including details of how such
offers may be accepted.
This announcement has been prepared in accordance with English
law, the Takeover Code and the Disclosure and Transparency Rules
and information disclosed may not be the same as that which would
have been prepared in accordance with the laws of jurisdictions
outside England.
The Acquisition will be subject to the applicable rules and
regulations of the FCA, the London Stock Exchange and the Takeover
Code.
The distribution of this announcement in jurisdictions other
than the United Kingdom and the availability of the Acquisition to
Essar Energy Shareholders and/or Essar Energy Convertible
Bondholders who are not resident in the United Kingdom may be
affected by the laws of relevant jurisdictions. Therefore any
persons who are subject to the laws of any jurisdiction other than
the United Kingdom or Essar Energy Shareholders or Essar Energy
Convertible Bondholders who are not resident in the United Kingdom
will need to inform themselves about, and observe, any applicable
requirements.The receipt of cash pursuant to the Acquisition by a
holder of Essar Energy Shares and/or Essar Energy Convertible Bonds
may be a taxable transaction for income tax purposes under foreign
tax laws. Each holder of Essar Energy Shares and/or Essar Energy
Convertible Bonds is urged to consult his independent professional
adviser immediately regarding the tax consequences of acceptance of
the Acquisition.
Unless otherwise determined by Bidco or EGFL or required by the
Takeover Code and permitted by applicable law and regulation, the
Acquisition is not being, and will not be, made, directly or
indirectly, in or into or by the use of the mails of, or by any
other means or instrumentality (including, without limitation,
electronic mail, fax transmission, telephone, internet or other
forms of electronic communication) of interstate or foreign
commerce of, or any facility of a national state or other
securities exchange of any Restricted Jurisdiction and will not be
capable of acceptance by any such use, means, instrumentality or
facility or from within any Restricted Jurisdiction.
Accordingly, unless otherwise determined by Bidco or EGFL or
required by the Takeover Code and permitted by applicable law and
regulation, copies of this announcement are not being, and must not
be, directly or indirectly, mailed, transmitted or otherwise
forwarded, distributed or sent in, into or from any Restricted
Jurisdiction and persons receiving this announcement (including,
without limitation, custodians, nominees and trustees) must not
mail or otherwise forward, distribute or send it in, into or from
such jurisdiction. Any person (including, without limitation, any
custodian, nominee and trustee) who would, or otherwise intends to,
or who may have a contractual or legal obligation to, forward this
announcement, the Offer Document and/or any other related document
to any jurisdiction outside the United Kingdom should inform
themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdiction.
Notice to US holders
US holders should note that the Acquisition relates to the
shares and bonds of non-US companies, is subject to UK disclosure
requirements (which are different from those of the United States).
The Acquisition is being made in the United States without being
subject to the filing, disclosure and procedural requirements of
Section 14(d) and Regulation 14D and other US tender offer rules
under the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act").
US holders should note that UK disclosure requirements are
different from those of the US. The Acquisition is being made in
accordance with the requirements of the Takeover Code. Accordingly,
the Acquisition is subject to disclosure and other procedural
requirements, including with respect to withdrawal rights and offer
timetable, that are different from those applicable under US
domestic tender offer procedures and law.
The receipt of cash pursuant to the Acquisition by a US holder
of Essar Energy Shares and/or Essar Energy Convertible Bonds may be
a taxable transaction for US federal income tax purposes and under
applicable US state and local, as well as foreign and other tax
laws. Each holder of Essar Energy Shares and/or Essar Energy
Convertible Bonds is urged to consult his independent professional
adviser immediately regarding the tax consequences of acceptance of
the Acquisition.
It may be difficult for US holders of Essar Energy Shares and/or
Essar Energy Convertible Bonds to enforce their rights and any
claim arising out of the US federal securities laws, since EGFL,
Bidco and Essar Energy are located in a non-US country, and some or
all of their officers and directors may be residents of a non-US
country. US holders of Essar Energy Shares and/or Essar Energy
Convertible Bonds may not be able to sue a non-US company or its
officers or directors in a non-US court for violations of the US
securities laws. Further, although US holders are not waiving their
rights under US federal laws by accepting the Shares Offer and/or
the Bonds Offer, it may be difficult to compel a non-US company and
its affiliates to subject themselves to a US court's judgment.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the Exchange Act, EGFL, Bidco or their nominees or
brokers (acting as agents) may from time to time make certain
purchases of, or arrangements to purchase, Essar Energy Shares
and/or Essar Energy Convertible Bonds outside the United States,
other than pursuant to the Acquisition, before or during the period
in which the Acquisition remains open for acceptance. These
purchases may occur either in the open market at prevailing prices
or in private transactions at negotiated prices. Such purchases or
arrangements to purchase Essar Energy Shares and Essar Energy
Convertible Bonds must comply with English law, the Takeover Code
and other applicable law. Any information about such purchases will
be disclosed as required in the UK and will be available via a
Regulatory Information Service and will be available on EGFL's
website by no later than 12 noon on the Business Day following it
being made available via a Regulatory Information Service.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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